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Most readers here have significant flexibility in our work schedules and choice of jobs. But right now, I take on an extra responsibilities and an extra 10 hour
by scarmig 10y ago
Most readers here have significant flexibility in our work schedules and choice of jobs. But right now, I take on an extra responsibilities and an extra 10 hours a week over the regular 40 hours in the hopes of getting a promotion and a ~15% raise. This flies flatly in the face of a sublinear utility to income relationship. And I choose this even though I could easily move to a less intense or part-time job.
What's your theory to explain these choices? They're not crazy, and if anything are more typical than atypical. Some personal hypotheses, all of which except the last would counteract a UBI work disincentive:
1) In terms of labor choices, you've got to view utility primarily as a function of status, not income. Status is a positional good and, within a given profession, is highly correlated with income. So although I'm chasing a relatively small bump in salary, it will give outsize gains in utility.
2) Putting extra work in now is best viewed as investing in your own human capital, as a promotion isn't a permanent gold star for delivering on a project but instead supposed to recognize an increase in your human capital. That kind of increase in human capital provides lifelong excess monetary returns that exceed the decreasing marginal utility of money.
3) The increasing concentration of wealth accruing to the most productive workers means that income is in some kind of power law relationship with work effort.
4) The extra utility of a promotion is coming primarily from non-monetary effects, such as more autonomy in work and ability to work on more interesting problems.
5) Some combination of 1-4 exist and are valid, but they only have a significant effect on work effort toward the higher end of the income spectrum. A cashier boy doesn't gain any real status with a fifty cent raise, and the most-skilled and hardest working barista is not bringing home millions of dollars. Their work-for-utility functions are dominated by the effect of beer money, and the tenth beer is never as good as the first.
If 5) is true, a UBI would, of course, result in a significant increase in voluntary unemployment. I'm not sure it's even really a bad thing, though it'd be good to have a sense of how large the effect is and where it kicks in, which would have to be an empirical question.
I wonder if there'd be a significant gender split in how a UBI acts as a [dis]incentive to work.
- yummyfajitas 10y agoThis flies flatly in the face of a sublinear utility to income relationship. It does no such thing. Will you put in an extra 20 hours for a 30% raise? How about 30 hours for a 45% raise? Sublinear utility merely means that there is some point at which you'll stop. I wonder if there'd be a significant gender split in how a UBI acts as a [dis]incentive to work. In the Mincome experiment, which resulted in a 10% decrease in work effort, the effect was higher among women than men. However given that the original data/study is unavailable (merely news reports about it), it's impossible to know if that effect was significant. (Back in the day they weren't as good at multiple comparisons corrections as they are now.)
- AnthonyMouse 10y ago> It does no such thing. Will you put in an extra 20 hours for a 30% raise? How about 30 hours for a 45% raise? By that point you're just running into the superlinear cost of time. Easy demonstration: What about an extra 130 hours for 195%? 40 + 130 > 168, so that's literally impossible. 120 would be possible but you would die of sleep deprivation. Even if the value of money is linear or superlinear, the value of time quickly catches up to it as it becomes more scarce. > In the Mincome experiment, which resulted in a 10% decrease in work effort, the effect was higher among women than men. You always cite the 10% but the link you gave last time showed that the majority of the decrease was from young mothers and students. That's clearly a different situation than people quitting their jobs to play video games.
- yummyfajitas 10y agomajority of the decrease was from young mothers and students. Let me repeat: "However given that the original data/study is unavailable (merely news reports about it), it's impossible to know if that effect was significant. (Back in the day they weren't as good at multiple comparisons corrections as they are now.)"