Replication data for: Do Workers Work More if Wages Are High? Evidence from a Randomized Field Experiment

Summary:  View help for Summary Most previous studies on intertemporal labor supply found very small or insignificant substitution effects. It is possible that these results are due to constraints on workers' labor supply choices. We conducted a field experiment in a setting in which workers were free to choose hours worked and effort per hour. We document a large positive elasticity of overall labor supply and an even larger elasticity of hours, which implies that the elasticity of effort per hour is negative. We examine two candidate models to explain these findings: a modified neoclassical model with preference spillovers across periods, and a model with reference dependent, lossaverse preferences. With the help of a further experiment, we can show that only loss-averse individuals exhibit a negative effort response to the wage increase. (JEL J22, J31)

JEL Classification:  View help for JEL Classification
      C91 Design of Experiments: Laboratory, Individual
      J22 Time Allocation and Labor Supply
      J31 Wage Level and Structure; Wage Differentials