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Does Poverty Change Labor Supply? Evidence from Multiple Income Effects and 115,579 Bags / Abhijit Banerjee, Dean Karlan, Hannah Trachtman, Christopher R. Udry.
- Format:
- Book
- Author/Creator:
- Banerjee, Abhijit.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w27314.
- NBER working paper series no. w27314
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- The income elasticity of labor supply is a central parameter of many economic models. We test the response of labor supply and effort to exogenous changes in income using data from a randomized evaluation of a multi-faceted grant program in northern Ghana combined with a bag-making operation that we implemented. We find strong evidence of a positive "income effect" on labor supply. We argue that simple models with either labor or capital market frictions cannot explain the results, whereas a model that allows for positive physiological or psychological productivity effects from higher income fits with our findings.
- Notes:
- Print version record
- June 2020.
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