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Labor Supply and the Value of Non-Work Time: Experimental Estimates from the Field†

Labor Supply and the Value of Non-Work Time: Experimental Estimates from the Field† AbstractWe estimate the marginal value of non-work time (MVT) using a field experiment. We offered job applicants randomized wage-hour bundles. Choices over these bundles yield estimates of the MVT as a function of hours, tracing out a labor supply relationship. The substitution effect is positive. Individual labor supply is highly elastic at low hours and more inelastic at higher hours. For unemployed applicants, our preferred estimate of the average opportunity cost of a full-time job due to lost leisure and household production is 60 percent of after-tax marginal product, and 72 percent when including fixed costs of employment and child-care costs. (JEL C93, J22, J24, J31, J64, J65) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review: Insights American Economic Association

Labor Supply and the Value of Non-Work Time: Experimental Estimates from the Field†

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References (47)

Publisher
American Economic Association
Copyright
Copyright © 2019 © American Economic Association
ISSN
2640-205X
eISSN
2640-2068
DOI
10.1257/aeri.20180070
Publisher site
See Article on Publisher Site

Abstract

AbstractWe estimate the marginal value of non-work time (MVT) using a field experiment. We offered job applicants randomized wage-hour bundles. Choices over these bundles yield estimates of the MVT as a function of hours, tracing out a labor supply relationship. The substitution effect is positive. Individual labor supply is highly elastic at low hours and more inelastic at higher hours. For unemployed applicants, our preferred estimate of the average opportunity cost of a full-time job due to lost leisure and household production is 60 percent of after-tax marginal product, and 72 percent when including fixed costs of employment and child-care costs. (JEL C93, J22, J24, J31, J64, J65)

Journal

American Economic Review: InsightsAmerican Economic Association

Published: Jun 1, 2019

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