Introduction:
Labor Supply and Leisure choice are two tradeoffs or choices that a person has. The aggregate of these choices depends on the total labor supply for an economy. There are several factors that determine whether the people will choose to supply the labor hours to the business and the economy, or whether they will choose to take the time off in leisure. The more number of labor hours available to an economy leads to higher Gross Domestic Products and other better economic indicators such as GDP per Capital, National Income, and Balance of Payment. The basic and most important reason of why people choose leisure over working is the pay. It is majorly believed that a higher pay is an incentive to work, however, it is not always correct. Higher pay rates sometimes discourage people from working more hours, as they get their desired amount in fewer hours. For example, if the person wants to earn $40 a day and pay rate is $5, he will have to work 8 hours. If the wage rate rises to $10 then that person will only have to work 4 hours. Rest of the time will be enjoyed by that person in leisure. This relationship is explained in the following diagram:
Source: (Chinn)
The above diagram clearly show as the wage has increased, the leisure hours have also increased from Xa to Xc. This is because of the fact that the person supplying the labor hours can earn the desired amount by working less, and can spend more time in leisure, and as a result higher wage rates can sometime discourage more working hours.
Body:
Article 1:
This article discussed how people spend their time depending on their emotional well being and experience. It recognizes the fact that once a person loses his job, his emotional well being is affected by it. He needs to change is working hours and patterns in order to do the job well. Similarly, leisure activities also decrease the chance of reemployment or getting a new job. This article checks the relationship between the unemployment and emotional well being. It also argues that although unemployed people have more time to engage in leisure activities, they enjoy it far less than those who are employed. The article makes assumptions that unemployed people are emotionally more distraught and sad. These claims are then tested by Krueger and Muller on a sample of 6025 over a period 12 weeks (Krueger and Mueller). The respondents were invited for interview for 12 weeks. Even if any of the respondents had found a job in the period, he was also called to record his responses for before and after finding a job. The main job of the article was to analyze the difference in time use and emotional well being of the respondent before and after reemployment.
The results show that majority of the time of unemployed people is spent in sleeping, job search, housework, and socializing. This shows the trend that people spent the hours they are not working on these activities, and there is little or no change in other activities like eating, shopping, and personal care. Similarly, in terms of emotional wellbeing, there is not loss of happiness for both employed and unemployed. The level of happiness for both employed and unemployed is very similar. The level of stress again is same for both set of people. However, unemployed people are sadder than employed people.
It can be concluded from the article above the unemployed people are sadder as compared to the employed folks. However, there is no change in happiness or stress levels. Similarly, much of the time of unemployed people is spent at home.
Article 2:
This article discusses the relationship between the health, and the quality of human capital on the labor supply in an economy. Although less importance is given to the relationship between the human capital and labor supply, the recent studies show that health is crucial factor in determining the labor supply and productivity. Human capital was always considered to be an important factor, but if this human capital is also healthy it increases the productivity and wages, and also labor supply in an economy. If workers are not healthy they are likely to be out of work more, and this will increase the time for leisure. However, this will result in less satisfaction. The article also finds out that human capital and health are compliments, and leisure and on-medical spending are substitutes.
The data uses a sample of around 1654 men. The finding of the result shows that unhealthy men earn $6.22 less per hour on average than healthy workers and workforce. Similarly, on average, healthy man are able to work two weeks more annually and as a result they are likely to earn more. Similarly, healthy men are able to make $150,000 more than unhealthy men in their lifetime earnings. The great divergence occurs at the age of 35. This shows that if health problems and human capital training is not provided in early ages it has massive effect on the earning and labor supply in the years to come.
It can be concluded from the paper that healthy men are able make more money by having higher wages, and they also supply more labor hours to the company and economy. The divergence between the wages and labor hours can be seen at around the age of 35. Therefore, it is essential to have good health treatment and training before the age of 35 in order for the person to earn more and supply more labor hours in the future.
Conclusion:
The paper makes it clear that emotional well being and supply of labor hours is directly related. So is the health of human capital, and the supply of labor. These finding encourages the human resource and economic policy makers to devise strategies for the national labor force that will address the issues regarding their health and emotional well being. When a person loses a job, he becomes sadder, and is likely to spend the time in leisure more. This is both an economic loss and personal loss for the person losing the job. The government can counter this by providing more job opportunities to the work force to make sure that their labor hours are properly utilized. Similarly, the link between human capital health and labor hours supplied is also positively related, and hence it is good for the policy makers to provide better health care facilities to the workforce so that they enjoy higher earnings and their labor hours are utilized in the process of economic growth.
References
Chinn, Menzie. 'Assessing Fantasy Scenarios | Econbrowser'. Econbrowser.com. N.p., 2010. Web. 30 Nov. 2014.
Hokayem, C, and J Ziliak. 'Health, Human Capital, And Life Cycle Labor Supply'. American Economic Review 104.5 (2014): 127-131. Print.
Krueger, Alan, and Andreas Mueller. 'Time Use, Emotional Well-Being, And Unemployment: Evidence From Longitudinal Data†'. American Economic Review 102.3 (2012): 594-599. Print.
