Revisiting the neoclassical theory of labour supply – Disutility of labour, working hours, and happiness

Steffen Rätzel

No 9005, FEMM Working Papers from Otto-von-Guericke University Magdeburg, Faculty of Economics and Management

Abstract: In empirical analyses, employment status has a substantial influence on individual wellbeing. People without work are consistently less happy, even after controlling for income. This result seems to contradict the standard theory assumption of labour disutility. In this paper, we analyze the impact of working time on happiness. The results show distinct positive utility effects caused by employment and working time. Happiness correlates positively with hours worked. However, there is an inverse U-shaped correlation – excessive hours reverse the relationship. Additionally, the results show the importance of exogenously given deviations of working time from the individually preferred labour supply. These discrepancies reduce well-being and counterbalance the positive effects of work.

Keywords: Labour Supply; Working Hours; Happiness; Life Satisfaction (search for similar items in EconPapers)
JEL-codes: D60 J22 J30 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-02
New Economics Papers: this item is included in nep-hap and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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