NC State Economist Mike Walden: Wages and Work Time

Individuals have two major limits in pursuing what they want – time and money.   Unfortunately, usually to increase one, the other has to be decreased.  For example, to have more money, a person often has to work more hours.   But a solution to this trade-off is to earn more per hour.  So does this mean that when someone has a higher wage rate, they work fewer hours?

  1. has long been a major question in economics
  2. in comparisons across countries, do see that workers earning higher wage rates

work less, and workers earning lower wage rates work more

  1. but within countries, like the US, don’t necessarily see this
  2. in the US, often see work hours increase as wage rates increase
  3. two reasons for this
  4. one – with higher wage rates, there is a greater reward from working more
  5. two – individuals earning higher wage rates can often free-up time when they

work more by hiring out some household tasks – like child care, household

cleaning, and yard service

  1. important decisions