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ResearchPaper
2020

Flexible work arrangements and precautionary behaviour

theory and experimental evidence

Abstract (English)

In the past years, work time in many industries has become increasingly flexible opening up a new channel for intertemporal substitution. To study this, we set up a two-period model with wage uncertainty. This extends the standard saving model by allowing a worker to allocate a fixed time budget between two work shifts or to save. To test the existence of these channels, we conduct laboratory consumption/saving experiments. A novel feature of our experiments is that we tie them to a real-effort style task. In four treatments, we turn on and off the two channels for consumption smoothing: saving and time allocation. Our four main findings are: (i) subjects exercise more effort under certainty than under risk; (ii) savings are strictly positive for at least 85 percent of subjects (iii) a majority of subjects uses time allocation to smooth consumption; (iv) saving and time shifting are substitutes, though not perfect substitutes.

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Publication license

Publication series

Hohenheim discussion papers in business, economics and social sciences; 2020,04

Published in

Other version

Faculty

Faculty of Business, Economics and Social Sciences

Institute

Institute of Economics

Examination date

Supervisor

Edition / version

Citation

DOI

ISSN

ISBN

Language

English

Publisher

Publisher place

Classification (DDC)

330 Economics

Original object

Standardized keywords (GND)

Sustainable Development Goals

BibTeX

@techreport{Rostam-Afschar2020, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/6494}, author = {Rostam-Afschar, Davud and Orland, Andreas}, title = {Flexible work arrangements and precautionary behaviour : theory and experimental evidence}, year = {2020}, school = {Universität Hohenheim}, series = {Hohenheim discussion papers in business, economics and social sciences}, }

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