Allocation of Time and Human Energy and Its Effects on Productivity

Abstract

The supply of effort on the job has been virtually ignored as a component of the effective supply of labour. Typically, labour supply models assume the worker chooses the utility-maximizing number of hours to supply on the job as a function of a fixed wage rate which is independent of the worker's effort. This paper generalizes the worker's choice problem to include the situation in which the worker's income depends on effort exerted on the job as well as time spent on the job.