An Analysis of Labor Supply Behavior from the Perspective of Reference-dependent Preferences
Promoting"high-quality and full employment"is a fundamental approach to enhancing the quality of life.Currently,the phenomenon of"Nei Juan"is becoming increasingly prominent in China's labor market."Nei Juan"can reduce the efficiency of resource allocation in the labor market and adversely affect the quality of employment,ultimately having profound implications for society and the economy.This is similar to how Japan transitioned from an overwork era characterized by"Nei Juan"to a low-desire society marked by"Tang Ping,"which led to difficult social issues,including a sharp decline in labor force participation rates,a significant reduction in labor productivity,and a fall in birth rates.Traditional economic theories have not adequately explained these phenomena.The neoclassical labor supply theory posits that work hours are the result of rational decisions by workers,primarily determined by wage rates,without considering peer interactions.However,the neoclassical labor supply theory fails to explain the emergence of"Nei Juan"and"Tang Ping."Combining reference-dependent preference theory and tournament theory,this study constructs a model of labor supply for disappointment-averse individuals by setting an endogenous weighted reference point.If individuals are more concerned about absolute benefits and weigh their own expected material utility in the reference point more heavily,peer effort will lead to a discouragement effect.Conversely,if individuals are more concerned about relative benefits and weigh peers'expected material utility more heavily in the reference point,peer effort will lead to a motivation effect.The study proposes an endogenous mechanism for generating reference points.To maximize utility,workers adjust the reference point generation mechanism based on peer effort.Theoretical derivation reveals that workers change their expectations based on external economic environments and adjust the reference point generation mechanism,which alters their labor supply behavior.Depending on the threshold of peer effort,if competition among workers is moderate and peer effort is below the threshold,individuals tend to use peers'expected material utility as a reference point and react positively.If competition is excessive and peer effort is above the threshold,individuals tend to use their expected material utility as a reference point and react negatively.Setting reasonable overtime wages and establishing harmonious labor relations can improve labor supply levels and peer effort threshold,guiding workers toward positive labor supply behaviors.Based on the CMDS 2017,this study empirically tests the peer effect on the labor supply behavior of Chinese workers by constructing a linear mean model of the labor supply equation.Empirical research results reveal that in the Chinese labor market,peer effort has a significant motivational effect on labor supply behavior,indicating a clear presence of"Nei Juan."The peer motivation effect on labor supply is mainly evident among workers with medium and long work hours,and this effect intensifies with longer working hours.However,short-time workers are not affected by peer effects;their labor supply behavior is primarily influenced by wage rates.Workers under strong competitive pressure and high mental stress,those with weak personal opinions,and those with work bonuses experience a stronger peer motivation effect.The policy implications of this study are as follows:First,government agencies should strengthen the supervision of enterprises'compliance with the Labor Law to ensure the reasonable protection of workers'rights and promote high-quality employment.Second,government agencies should strive to promote the establishment of positive labor relations within enterprises.By enhancing workers'social preferences,they can stimulate their enthusiasm for work,improve work efficiency,and achieve mutually beneficial outcomes for both enterprises and employees.Third,government agencies should advocate for raising minimum wage standards and encourage enterprises to implement"efficiency wage"performance distribution schemes.This would significantly boost workers'wage levels and facilitate the rapid achievement of the common prosperity goal.Fourth,government agencies should vigorously advance the marketization process of the labor market,removing barriers caused by household registration,sectors,regions,and occupations to create a fair competition environment in the labor market.This would significantly enhance labor market efficiency and contribute to achieving the goal of high-quality employment for workers.
万方数据
维普
