Non-pecuniary Work Incentive and Labor Supply

Y. Hossein Farzin () and Ken-Ichi Akao

No 2006.21, 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 to gain socio-psychological (nonpecuniary) benefits, we show that once nonpecuniary work incentives are incorporated into standard labor supply theory, (i) the wage rate under-estimates (over-estimates) the true value of nonwork/leisure time when work has nonpecuniary benefits (costs), (ii) nonpecuniary benefits can be a substitute for monetary wages as work incentives, (iii) at very low wage rates, work can become a net source of utility, and (iii) the shape of labor supply curve differs from standard theory. We also identify conditions under which a greater nonpecuniary work incentive generates a larger individual labor supply, and examine the effects of non-wage income on labor supply both for paid and voluntary work.

Keywords: Nonpecuniary incentives; Labor supply; Non-wage income; Voluntary work (search for similar items in EconPapers)
JEL-codes: D62 I31 J22 (search for similar items in EconPapers)
Date: 2006-02
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://feem-media.s3.eu-central-1.amazonaws.com/w ... oads/NDL2006-021.pdf (application/pdf)

Related works:
Working Paper: Non-pecuniary Work Incentive and Labor Supply (2006)
Working Paper: Non-pecuniary Work Incentive and Labor Supply (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2006.21

Access Statistics for this paper

More papers in Working Papers from Fondazione Eni Enrico Mattei Contact information at EDIRC.
Bibliographic data for series maintained by Alberto Prina Cerai ( this e-mail address is bad, please contact ).