/ 0
60%
Table of contents

Document in text mode:

LABORSUPPLYOFNEWYORKCITYCABDRIVERS:ONEDAYATATIME*COLINCAMERERLINDABABCOCKGEORGELOEWENSTEINRICHARDTHALERLife-cyclemodelsoflaborsupplypredictapositiverelationshipbetweenhourssuppliedandtransitorychangesinwages.WetestedthispredictionusingthreesamplesofwagesandhoursofNewYorkCitycabdrivers,whosewagesarecorrelatedwithindaysbutuncorrelatedbetweendays.Estimatedwageelasticit-iesaresigniŽcantlynegativeintwooutofthreesamples.Elasticitiesofinexperi-enceddriversaverageapproximately21andarelessthanzeroinallthreesamples(andsigniŽcantlylessthanforexperienceddriversintwoofthreesamples).OurinterpretationoftheseŽndingsisthatcabdrivers(atleastinexperi-encedones):(i)makelaborsupplydecisions“onedayatatime”insteadofinter-temporallysubstitutinglaborandleisureacrossmultipledays,and(ii)setaloosedailyincometargetandquitworkingoncetheyreachthattarget.I.INTRODUCTIONDynamicmodelsoflaborsupplypredictthatworkhoursshouldrespondpositivelytotransitorypositivewagechanges,asworkersintertemporallysubstitutelaborandleisure,...