Psychology of Labor

The standard model of labor in economics assumes that work is aversive and that the employer, therefore, has to pay the employees money to compensate them for the disutility they incur when producing labor. While this basic model approximates the provision of some types of jobs (smelling shoes to diagnose odor problems, collecting garbage, lifting bricks), it seems to mis-characterize the motivations people have in taking jobs requiring more intellectual abilities, thinking, or creativity. Professors, physicians, teachers, and engineers are but a few examples of professions that fulfill aspects of one�s life that are not captured by the standard model. We aim to develop new frameworks, based on the psychology of labor, from which to understand the complex and important problem of compensation and its relationship to motivation, effort, and loyalty.