Are preferences for work reference dependent or time nonseparable? New experimental evidence

Disutility spillovers; Income targeting; Lab experiment; Revealed preferences; Time separable model; Timing-specific preferences; Working time; Finance; Economics and Econometrics

Abstract :

[en] Tests of labor supply models often rely on wages. However, wage variation alone generally cannot disentangle the classical time separable model and its extensions: reference dependent preferences (income targeting) and time nonseparable preferences (disutility spillovers; timing-specific preferences). We set up a novel laboratory experiment in which individuals choose their working time. We vary, independently, wages, historical income paths, and cumulative past work. We also vary the timing of experimental sessions. Statistical tests and stochastic revealed preference methods cannot reject the classical model in favor of income targeting or disutility spillovers, but the data suggest that labor supply varies by time-of-the-day.

Disciplines :

Economic systems & public economics

Author, co-author :

Cosaert, Sam ; University of Antwerp, Antwerp, Belgium

Lefebvre, Mathieu ; Université de Liège - ULiège > Ecole de Gestion de l'Université de Liège ; Aix Marseille Univ, CNRS, AMSE, Marseille, France

Martin, Ludivine ; Luxembourg Institute of Socio-Economic Research (LISER) and Centre de Recherche en Économie et Management (CREM), Esch-sur-Alzette, Luxembourg

Language :

English

Title :

Are preferences for work reference dependent or time nonseparable? New experimental evidence

Publication date :

September 2022

Journal title :

European Economic Review

ISSN :

0014-2921

eISSN :

1873-572X

Publisher :

Elsevier B.V.

Volume :

148

Pages :

104206

Peer reviewed :

Peer Reviewed verified by ORBi

Additional URL :

https://api.elsevier.com/content/article/PII:S0014292122001209?httpAccept=text/xml

Funding text :

We are grateful to the editor and two anonymous referees. Their suggestions helped us to improve the paper and, in particular, to decompose ‘time nonseparable’ preferences into disutility spillovers from the real-effort task itself and time-specific preferences for work associated with the timing of experimental sessions. Furthermore, we thank LISER-LAB manager Francesco Fallucchi for running the experimental sessions in Luxembourg. This work was supported by the French National Research Agency Grant ANR-17-EURE-0020 , and by the Excellence Initiative of Aix-Marseille University - A*MIDEX.

Available on ORBi :

since 06 January 2023

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