Are you working the right amount?
The basic lifetime labor supply theory says that you should work the most hours when your wages are the highest--this way you can kick back and enjoy leisure when your wages are low.
If you're still in grad school, you might consider that the return to working may be higher right now than any other time in your career since the quality of work that you amass during this time will determine your first job which has been shown to have profound effects on the rest of your career.
4 comments:
Ha. And me who thought that your wages are highest when you work most! :-)
You're forgetting that in the "standard labor supply model" there's both an income and a substitution effect. If your wages are high then why not sit back and enjoy the leisure sit you can get the same income with less work?
But I think you're on to something, which basically means that the "standard labor supply model" is not the applicable one here. Maybe something like a signaling model or an investment model where you got to pay some up front fix costs.
Anyway. The perceived returns to working hard in an academic endeavor are high up until you get tenure at which point there's a big, discontinuous drop in'em. Or at least that's how I see it, looking off into the future.
I wasn't forgetting about the income effect but I can see how you might think that. I was thinking about the "standard *lifetime* labor supply model." In that case, we only need to think about the substitution effect unless there's an unexpected shock to permanent income (like coming up with a paper idea idea you didn't know you were capable of.)
Post edited to clarify.
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