عرضه نیروی کار، خانواده و فقر:منحنی S شکل عرضه نیروی کار

The canonical model of labor supply is extended to account for subsistence needs and a frequently rigid division of labor within families (gender). Various theories that have been put forward are thus reconciled, in particular with respect to the distinct work choices of the poor. The model predicts negative labor supply elasticities for secondary workers at low wage rates and positive ones at higher rates, but near 0 for primary workers at all levels. Detailed time-allocation data of the rural Philippines support these conclusions, as well as evidence from other studies, including of industrialized countries. Policy implications are briefly discussed.

The present paper shows that the canonical labor supply model of textbooks is, in fact, incomplete; it fails to capture the observed behavior of poor people. According to the textbook model poor people would work least. In practice, the opposite is often observed in less industrialized countries, but also in wealthier countries especially during economic downturns. People in impoverished circumstances appear to be working longer hours as wages fall to maintain income constant; they display a negative labor supply elasticity. These observations, however, have been somewhat of an embarrassment for the neo-classical theory, which contends that labor supply elasticities are usually positive when people respond to economic opportunities. That evidence has therefore tended to be dismissed in the literature as resulting from “irrationality” (culture of poverty), or from limited consumption opportunities (quantity constraint), in short, as being an exotic curiosity of “backward” regions. This paper offers a third explanation on the assumption that poor people are “rational”: they have the same preference structure as wealthier individuals and are price-responsive, but they face an additional subsistence constraint. That extension of the canonical model yields an S-shaped (sinusoidal) labor supply schedule for the family, instead of the habitual C-shape. It also has the merit of putting the claim of “workers’ exploitation” in perspective by specifying, in a neo-classical framework, the conditions under which that might occur. As such, the present model has important policy implications with respect to: minimum wages, profit maximization of firms and monopolies, trade and growth prospects of poor countries (discussed in other papers), in addition to employment policies for poor women and children in particular due to a frequently rigid division of labor within families.