Pecuniary Incentives to Work in the U.S. during World War II

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It is argued that changes in workers' budget sets cannot explain the dramatic increases in" civilian work in the U.S. during World War II. Although money wages grew during the period wartime after-tax real wages were lower than either before or after the war. Evidence from the" 1940's also appears to be inconsistent with other pecuniary explanations such as wealth effects of" government policies, intertemporal substitution induced by asset prices and changes in the nonmarket price of time. Although untested and relatively undeveloped nonpecuniary models of behavior are tempting explanations for wartime work."

Published: Journal of Political Economy, Vol. 106, no. 5 (October 1998): 1033-1077.

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