"How Many Hours Would you Want to Work a Week?": Job Quality and the Omitted Variables Bias in Labour Supply Models

Nadia Steiber

No 121, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: This paper sets out to provide an understanding of how individuals form their preferences over the extent of their paid work involvement - their working time preferences - in different work environments and societal contexts. The main objective of the empirical analysis is to investigate how preferences of this kind are constructed at the individual level and adapted over time following changes in work- and familyrelated circumstances. The consideration of the Old and New Länder of Germany as cases for comparative analysis allows for a test of common factors in different contexts of economic conditions and gender relations. The empirical findings from a longitudinal analysis of the German Socio-Economic Panel (1993-2003) run counter to the predictions of neoclassical labour supply theory. This owes to a fundamental difference in terms of theoretical approach. While (most) economists tend to view paid work in instrumental terms - as something that people perform only for its monetary rewards, this study takes account of intrinsic work rewards as central determinants of work motivation. We find the qualitative experience of work to exert an independent influence on individuals' preferences over work hours, and therefore argue for the inclusion of work quality as a central factor in labour supply decisions.

Keywords: Labour; labour supply; working hours; preferences; panel data analysis (search for similar items in EconPapers)
JEL-codes: C23 D1 J1 J17 J22 (search for similar items in EconPapers)
Pages: 27 p.
Date: 2008
New Economics Papers: this item is included in nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp121

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