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Why can the job offer have a negative relationship between salary and quantity of work?

Economics Asked on May 19, 2021

Excuse me the following question arose, is it possible that the job offer has a negative relationship between salary and the amount of work?

One Answer

Sure it is! Look up Borjas, Labor Economics, in the Labor Supply chapter.

In the following graph you notice that the supply curve is upwards sloping until wage $W = 20$, but for any greater level of compensation, the worker does not need to work as hard anymore, and starts reducing their hours of labor.

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For an example, you might want to imagine a young music performer. If their earnings from concerts are, say, $ W = $800 $ a month, they might have to gig a lot. As their music becomes known, their earnings from concerts might exceed $ W=$8000 $, at which point, they may decide to work less, thus, reducing their number of concerts.

Answered by S. Iason Koutsoulis on May 19, 2021

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