Non-pecuniary Work Incentive and Labor Supply

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 21.2006

Classification and Topics

• Classification: Wirtschaft ; Externalities ; Time Allocation and Labor Supply ; General Welfare; Well-Being
• Subject: Nonpecuniary incentives ; Labor supply ; Non-wage income ; Voluntary work ; Arbeitsangebot ; Leistungsanreiz ; Ehrenamtliche Arbeit ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Farzin, Y. Hossein ; Akao, Ken-Ichi
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/73918
• Last update: 10.03.2025, 11:43 AM CET