Ruhr Economic Papers

Ruhr Economic Papers #418

Job Characteristics and Labour Supply

by Lars Kunze and Nicolai Suppa

TU Dortmund, 06/2013, 42 S./p., 8 Euro, ISBN 978-3-86788-473-0 DOI: 10.4419/86788473



We document the importance of non-pecuniary aspects in employment relationships by showing that labour supply elasticities differ significantly among individuals’ job characteristics. Factor analysis indicates the relevance of four characteristics: autonomy, workload, variety and job security. Using a discrete choice model of family labour supply on the basis of Australian data, we show that income elasticities are significantly higher among individuals with “good” characteristics (e.g. a securer job) whereas wage elasticities are significantly lower. This result holds for both men and women. Our main hypothesis are derived within the ‘new approach to consumer theory proposed by Lancaster.

JEL-Classification: J22, J28, J32, C25

Keywords: Labour supply; Discrete choice model; Job characteristics