Daily labor supply in East Africa: Some interesting patterns, and what they may mean

Abstract

Using detailed data on labor supply and daily shocks, we show that the daily supply of manual, physically-demanding labor responds to both unexpected and expected daily demands on income. What's more, we find that the quitting hazard within a given work day increases discontinuously as earned income reaches the day's cash need. We conjecture that workers set a personal rule of “earning enough for the day's need” as an internal commitment device to provide effort. The inability to better arbitrage intertemporally has substantial welfare costs: greater variance in hours worked is associated with worse health, and we estimate that workers would earn 5% more by working a set number of hours each day (more if their wage elasticity were positive). (joint with Jon Robinson).