Do Some People Work Harder than Others? Evidence from Real Estate Brokerage
Posted: 30 Jan 2007
The decision to work and its levels of intensity are estimated for the real estate brokerage industry where workers can set their own hours. A three-stage model of the brokerage labor market is presented with decisions made recursively between full- and part-time status, wage offers and hours worked. The application is to data from a cross-sectional survey of 6,842 real estate licensees in the United States for 1999. Conditional on self-selection, an expected wage for real estate licensees is estimated given skills and personal characteristics. That expected wage enters the supply-side equation for the number of hours worked. The findings indicate the skills such as education, experience and licensee status are related to higher wages, but there is a negative self-selection in wages: part-time workers have higher unmeasured skills. Schooling and experience decreases hours worked, consistent with increasing efficiency. The resulting labor supply elasticity with respect to the wage is 0.24.
Keywords: agency, earnings, labor supply, part-time, real estate brokerage, race, work choice
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