The daily grind: Cash needs and labor supply

Pascaline Dupas, Jonathan Robinson, Santiago Saavedra

Research output: Contribution to journalArticlepeer-review

Abstract

The majority of people in developing countries are self-employed and can therefore set their own work hours. How do self-employed individuals motivate themselves to work hard day after day? We document four facts about the labor supply of Kenyan bicycle-taxi drivers: (1) drivers work more on days with higher cash needs; and (2) the quitting hazard increases once the driver earns enough to meet his day's need; but (3) the needs are not binding subsistence requirements; and (4) randomized cash payouts have no meaningful effect on labor supply. These results are consistent with models in which workers have reference-dependent preferences over earning targets.

Original languageEnglish (US)
Pages (from-to)399-414
Number of pages16
JournalJournal of Economic Behavior and Organization
Volume177
DOIs
StatePublished - Sep 2020

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

Fingerprint Dive into the research topics of 'The daily grind: Cash needs and labor supply'. Together they form a unique fingerprint.

Cite this