Do Some People Work Harder than Others? Evidence from Real Estate Brokerage
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 that 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.
KeywordsAgency Earnings Labor supply Part-time Real estate brokerage Race Work choice
We are grateful to Paul Bishop, Ellen Roche and Abdullah Yavas along with two referees for their comments and suggestions. Data were provided with the assistance of the National Association of Realtors.
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