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Are Labor Supply Decisions Consistent with Neoclassical Preferences? Evidence from Indian Boat Owners

Xavier Gine (), Monica Martinez-Bravo () and Marian Vidal-Fernandez ()

Working Papers from CEMFI

Abstract: This paper studies the labor supply of South Indian boat owners using daily labor participation decisions of 247 boat owners during seven years. We test the standard neoclassical model of labor supply and find that boat owners' labor participation depends positively on expected earnings but also on recent accumulated earnings, albeit weakly. Participation elasticities with respect to expected earnings range between 0.8 and 1.3 and about -0.05 and -0.01 with respect to changes in recent income. While recent earnings affecting participation is at odds with the standard neoclassical model, the magnitude of the effects is small, suggesting that the neoclassical model is a good approximation of the labor supply behavior of boat owners in southern India.

Keywords: Intertemporal labor supply; daily income. (search for similar items in EconPapers)
JEL-codes: J22 J31 (search for similar items in EconPapers)
Date: 2016-09, Revised 2017-01
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Related works:
Journal Article: Are labor supply decisions consistent with neoclassical preferences? Evidence from Indian boat owners (2017) Downloads
Working Paper: Are Labor Supply Decisions Consistent with Neoclassical Preferences? Evidence from Indian Boat Owners (2016) Downloads
Working Paper: Are labor supply decisions consistent with neoclassical preferences ? evidence from Indian boat owners (2016) Downloads
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