Labor-leisure choice : is everything as straightforward as one might have thought?

Gahramanov, Emin and Tang, Xueli 2016, Labor-leisure choice : is everything as straightforward as one might have thought?, Theoretical economics letters, vol. 6, no. 4, pp. 750-760, doi: 10.4236/tel.2016.64079.

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Title Labor-leisure choice : is everything as straightforward as one might have thought?
Author(s) Gahramanov, Emin
Tang, XueliORCID iD for Tang, Xueli
Journal name Theoretical economics letters
Volume number 6
Issue number 4
Start page 750
End page 760
Total pages 11
Publisher Scientific Research Publishing
Place of publication Irvine, Cal.
Publication date 2016-08
ISSN 2162-2078
Keyword(s) Life-Cycle Consumption and Labor Supply,
Constrained Optimal Control
Summary We argue that a full understanding of a rational labor supply choice in a standard dynamic life cycle framework is obscure, despite the framework’s being seemingly self-explanatory, straightforward, and intuitively sensible. In a completely friction-free environment, we, to our knowledge, are the first to provide a complete analytic solution to the benchmark model that presumes a kind of labor supply behavior that is typically taken as the standard in economic studies. We find thatsuch standard behavior holds only for a narrow set of parameters. For many alternative parameterizations, the labor supply behavior of a rational agent is either highly unrealistic, or extremely hard to predict and interpret. A complete understanding of a rational, intertemporal labor supply choice requires further analysis.
Language eng
DOI 10.4236/tel.2016.64079
Field of Research 140103 Mathematical Economics
Socio Economic Objective 910109 Savings and Investments
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2016, by authors and Scientific Research Publishing Inc.
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Document type: Journal Article
Collections: Faculty of Business and Law
Department of Economics
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