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Non-pecuniary Value of Employment and Individual Labor Supply

Y. Hossein Farzin () and Ken-Ichi Akao

No 2004.158, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Recognizing that people value employment not only to earn income to satisfy their consumption needs but also as a means of community involvement that provides socio-psychological (non-pecuniary) benefits, we show that once the non-pecuniary benefits of employment are incorporated in the standard individual’s utility function, then at very low income levels employment can be a source of utility, inducing individuals to supply labor to the extent possible. We also show the conditions under which a greater non-pecuniary effect of employment generates a larger individual labor supply.

Keywords: Non-pecuniary effects; Employment value; Labor supply (search for similar items in EconPapers)
JEL-codes: D62 J22 I31 (search for similar items in EconPapers)
Date: 2004-12
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Handle: RePEc:fem:femwpa:2004.158