Testing Alternative Models of Labor Supply. Evidence from Taxi-Drivers in Singapore

Y.K. Chou

No 768, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: In this paper, we use data from a survey of taxi drivers in Singapore to test two competing labor supply hypotheses: the standard intertemporal model and the income targeting model, where workers set an earnings target over some short time horizon. The former predicts positive wage elasticities of labor supply, while an extreme form of the latter implies an elasticity of -1. The estimated wage elasticities are persistently negative, even after correcting for measurement error using instrumental variables. However, these findings are consistent with those in Camerer et al. (1997)'s study of New York City cab drivers.

Keywords: LABOUR; INCOME; MODELS; WAGES (search for similar items in EconPapers)
JEL-codes: C23 J22 J30 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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