A central tenet of U.S. "conservative" and Republican economic policy since at least the election of Reagan in 1980 is that tax cuts cause people to work more and longer hours. This is part of the so-called "supply side economics". The implication is that the longer hours and more labor supply will then raise the … Continue reading Tax Cuts Do Not Increase Labor Supply
Why do people work? At first it seems an easy question - to get money or earn income is the answer that comes quickly to mind. Indeed, mainstream neo-classical micro economic theory answers the question this way and uses it to build a model where people (households) make decisions about how much to work (called … Continue reading Why Do People Work?