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An empirical investigation of owner–manager labor‐supply behavior
Author(s) -
Feinberg Robert M.
Publication year - 1987
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090080306
Subject(s) - wage , economics , labour economics , marginal cost , microeconomics , elasticity (physics) , business , panel data , econometrics , materials science , composite material
This paper uses data from the University of Michigan's Panel Study of Income Dynamics to examine an owner–manager's labor‐supply decision. Graphical analysis is used to motivate the central hypothesis tested, which is that the hourly wage paid to comparable hired managers is the marginal price of leisure to the owner–manager and will help determine his hours worked. The results suggest that this is an appropriate interpretation, with the average elasticity of hours‐worked with respect to cost of comparable hired managerial services equal to + 0.23.