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Asymmetric labor-supply responses to wage changes: Experimental evidence from an online labor market

Philipp Doerrenberg, Denvil Duncan and Max Löffler

Labour Economics, 2023, vol. 81, issue C

Abstract: We test whether labor supply responds symmetrically to wage increases and decreases using a randomized real effort online experiment. The results show that wage increases have smaller effects on labor supply than wage decreases of equal magnitude, especially on the extensive margin where the response to a wage decrease is twice that to a wage increase. This finding suggests that labor-supply responses to wage changes are asymmetric. We discuss the potential mechanisms behind our results including standard models of labor supply, reference dependence in consumption and reciprocity.

Keywords: Labor supply; Labor supply elasticities; Asymmetric effects of wages; Field experiment; Amazon Mechanical Turk (search for similar items in EconPapers)
JEL-codes: D03 J20 J22 J31 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Asymmetric Labor-Supply Responses to Wage-Rate Changes: Evidence from a Field Experiment (2016) Downloads
Working Paper: Asymmetric labor-supply responses to wage-rate changes: Evidence from a field experiment (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:81:y:2023:i:c:s0927537122001956

DOI: 10.1016/j.labeco.2022.102305

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