Labor supply, the family and poverty: the S-shaped labor supply curve

The canonical model of labor supply is extended to account for subsistence needs and a frequently rigid division of labor within families (gender). Various theories that have been put forward are thus reconciled, in particular with respect to the distinct work choices of the poor. The model predicts negative labor supply elasticities for secondary workers at low wage rates and positive ones at higher rates, but near 0 for primary workers at all levels. Detailed time-allocation data of the rural Philippines support these conclusions, as well as evidence from other studies, including of industrialized countries. Policy implications are briefly discussed. (C) 2002 Elsevier Science B.V. All rights reserved.