Book contents
- Frontmatter
- Contents
- Foreword
- Preface
- 1 Introduction: the importance of life-cycle analysis
- 2 The life-cycle human capital model
- 3 Schooling
- 4 Post-school investment
- 5 Labour supply
- 6 Gender in the labour market
- 7 Compensating wage differentials and heterogeneous human capital
- 8 Information and wages
- 9 Payment systems and internal labour markets
- 10 Unionisation
- References
- Subject index
- Author index
5 - Labour supply
Published online by Cambridge University Press: 18 September 2009
- Frontmatter
- Contents
- Foreword
- Preface
- 1 Introduction: the importance of life-cycle analysis
- 2 The life-cycle human capital model
- 3 Schooling
- 4 Post-school investment
- 5 Labour supply
- 6 Gender in the labour market
- 7 Compensating wage differentials and heterogeneous human capital
- 8 Information and wages
- 9 Payment systems and internal labour markets
- 10 Unionisation
- References
- Subject index
- Author index
Summary
Introduction
Up until now how much individuals work has been ignored. Instead we have concentrated on human capital accumulation assuming that individuals work full time over their life. However, clearly not everyone exhibits such work behaviour. As we shall see in chapter 6, assuming full work behaviour can lead us to overestimate expected human capital accumulation and earnings. To alleviate this problem we now study labourforce participation decisions.
Labourforce participation is harder to analyse than one might expect. Just as participation motivates human capital investment and hence wages (as will be discussed in the next chapter), so potential wages influence participation decisions. In fact, the influence of wages on work is the focus of this chapter. A further dimension of supply is the ‘effort’ which people put into their work. The issue of effort is related to supervision, and effort-related payment systems (piece rates), and will be considered in chapter 9.
Interesting questions arise in the participation/hours area. Married women's participation has increased considerably over time. For example in Britain in 1940 the participation rate of married women was only 10%, compared to about 50% in 1980. There has been a similar growth in the US as shown in table 5.1.
- Type
- Chapter
- Information
- The Economics of Earnings , pp. 96 - 136Publisher: Cambridge University PressPrint publication year: 1993