backward-sloping supply curve for labour

backward-sloping supply curve for labour The preference for increased leisure over increased remuneration. Thus, when wage incentives are offered to improve productivity, labourers respond by working shorter hours to earn the same money rather than harder or longer to earn more money.

Max Weber discussed this phenomenon in General Economic History (1923), citing it as an example of ‘economic traditionalism’, and arguing that ‘at the beginning of all ethics and the economic relations which result, is traditionalism, the sanctity of tradition, the exclusive reliance upon such trade and industry as have come down from the fathers. This traditionalism survives far down into the present; only a human lifetime in the past it was futile to double the wages of an agricultural labourer in Silesia who mowed a tract of land on a contract, in the hope of inducing him to increase his exertions. He would simply have reduced by half the work expended because with this half he would have been able to earn … as much as before’.

Early European colonial entrepreneurs were dismayed when native workers appeared unresponsive to wage incentives. This behaviour was widely interpreted as evidence of innate laziness, to be remedied by keeping wage rates down, so preventing idleness and forcing the worker into virtue. Sociological research in developing countries has established that a variety of alternative explanations can be offered for the phenomenon. For example, it may be a consequence of perceived opportunities for saving, investment, and social mobility; the nature of familial obligations regarding the distribution of rewards; or resentment against new patterns of authority. In other words, the context provided by local social and political institutions needs to be considered, since this can serve to make the backward-sloping supply curve as consistent with the maximization of individual welfare as is a positively sloped curve in other contexts (see M. P. Miracle , ‘Interpretation of Backward-Sloping Labour Supply Curves in Africa’, Economic Development and Cultural Change, 1976
). See also ECONOMIC MAN.