The Daily Grind: Cash Needs and Labor Supply

Publicado en

  • Journal of Economic Behavior & Organization


  • 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.

fecha de publicación

  • 2020

Líneas de investigación

  • Income Targeting
  • Intertemporal Labor Supply
  • Reference-Dependence


  • 177


  • C