Wednesday, December 29, 2010

Why do we work so much?

Why not work less and earn less but have more leisure? Here are some possible answers.
1.       I need the money for current consumption

1.1.              I need the money because I can barely make ends meet at the end of the month
1.2.              I am so much accustomed to my standard of living that it would be highly unpleasant to downgrade it
1.3.              I don’t want to have less than my neighbor
1.4.              I want to have these things they talk about in advertisements
1.5.              All these new products and services that I can buy are worth more to me than the time I spend to earn the money to buy them

2.       I need the money for things other than my current consumption

2.1.              I need the money to save for security
2.2.              I need the money to pay for the education of my children
2.3.              I need money to give it to others

3.       I work a lot now in order to work less later on

3.1.              It is more efficient to work a lot when you have a good job that pays well
3.2.              I work that much to save for earlier retirement
3.3.              I work that much to pay back the mortgage (which will allow me to work less or retire earlier later on since I will have neither rent nor interest to pay)

4.       My work brings me more than meets the eyes

4.1.              I work not so much for today’s salary than for the opportunity to climb higher in the hierarchy (or win the jackpot ) and earn more in the future
4.2.              I love my work

5.       I wouldn’t know what to do with more leisure

5.1.              I couldn’t enjoy more leisure with less money because I need money to travel and to be fit during my leisure
5.2.              I haven’t developed skills for using more leisure
5.3.              I would work less if I could enjoy more time with my friends, but they don’t have time because they work a lot

6.       I do not optimize my work load

6.1.              My employer does not offer part-time employment
6.2.              I just do the same thing as everyone else

Any other ideas?

In considering these motivations, it may be useful to ask the two following questions:
·        How widespread is it?Which of these motivations is actually widespread? What do the empirics say about it? And what does logic say? Is it for example logically possible that everybody works just for fun: in this case why would they be paid?

·        Does this motivation lead to inefficiencies?If everybody works so much only because they want to consume as much as their neighbor, then people would be happier if some brake could be applied to this race. Thus, the motivation to keep up with the Jones’s is bad in the sense that it leads to inefficiencies that might be reduced by an appropriate policy (taxation?).