Labour Supply Elasticities: Theory and Evidence from Switzerland

In this paper we analyse the labour supply in a static framework, examining the two basic components of labour services, effort and working time. We discuss how the method chosen by firms to extract effort from the workers affects the relationship between the hourly wage offered and the number of effective (or usual) hours of work, and how the existence of this labour demand consideration modifies the substitution and income effects of the labour supply as they are generally deduced in the standard approach.