Research On Labor Supply Mechanism Based On Taxi Drivers

This paper focuses on the mechanism of individual labor supply.At present,the main theories used to explain labor supply behavior include the intertemporal substitution theory in neoclassical economics,the income target theory and the reference-dependent preference theory of behavioral economics.Taxi drivers are faced with fluctuating wage rates,and freely make decisions on work participation and working hours.Compared with the common labor force with fixed wages and fixed working hours,taxi drivers can flexibly reflect the response to wage incentives and reduce the friction in the optimization process of labor supply,which is an ideal object for empirical research in labor economics.This paper uses first-hand trip-level big data of cruising taxi drivers and online ride-hailing drivers in the Shanghai taxi market to analyze the decision-making of work duration and labor participation,and empirically tests the above-mentioned theories of labor supply.The main research contents of the article are as follows:Firstly,the Shanghai cruising taxi market has experienced a passive process of capital deepening,with a large amount of labor loss and the form of labor changing from a double-shift system to a single-shift system.Based on this background,this paper constructs an individual dynamic labor supply model and analyzes the elasticity of labor supply duration on temporary wage changes under different factor ratios.Furthermore,this paper makes an empirical analysis based on the micro big data of Shanghai cruising taxi drivers.The results show that the temporary increase in wages will stimulate the increase of labor supply.With the deepening of capital,the wage elasticity of labor supply will increase,and the incentive and regulatory effect of wages on labor factors will be more obvious.The labor supply behavior of Chinese residents is in line with the rational man hypothesis of neoclassical economics,rather than the income target hypothesis of behavioral economics.Secondly,as a mode of sharing economy commercialization,online ride-hailing is developing rapidly in the world.It has changed the traditional travel service and spawned many new phenomena and problems.This paper uses the micro trip-level big data of online ride-hailing and cruising taxi drivers in the Shanghai taxi market for structural processing and analysis from the perspective of labor supply.Specifically,this paper compares the behaviors of online ride-hailing and cruising taxi drivers from the aspects of the trip,shift,cyclical change and capacity utilization.It is found that under different salary systems,total amount control policies,fare systems and matching mechanisms,the behaviors of online ride-hailing and cruising taxi drivers are different.Online car-hailing creates a more flexible form of labor supply,which makes the labor supply more adaptable to the changes in market demand,and improves the overall efficiency of the market from the perspective of supply and demand matching.However,its online matching mechanism does not significantly improve the individual operation efficiency of full-time drivers in the Shanghai taxi market.Thirdly,compared with the cruising taxis in most domestic and foreign cities which adopt the fixed fare mode of government pricing,online ride-hailing generally adopts the market-oriented fare of "dynamic price adjustment".Based on the micro big data of Shanghai online ride-hailing and cruising taxis,this paper verifies that the exogenous shock of rainfall contributes to the increase of taxi service demand and the decrease of labor supply under the fixed fare,and gives the reason why "it is difficult to take a taxi in rainy days" from the perspective of labor supply.Furthermore,this paper takes online ride-hailing drivers as the experimental group of the dynamic pricing system,and cruising taxi drivers working in the same period as the control group.It verifies that the dynamic pricing adjustment triggered by rainfall and morning and evening peak can significantly stimulate the increase of labor supply and ease the contradiction between supply and demand by increasing wages.In addition,the incentive effect of dynamic pricing adjustment on drivers is significant in the daytime,but not significant at night.This paper verifies the positive impact of dynamic pricing adjustment on labor supply,which is in line with the theory of intertemporal substitution of labor supply(participation).Taking the taxi market with both fixed and market-oriented fares as the research object,this paper gives evidence that market-oriented fares can improve the overall market welfare,and supports the role of the market mechanism in promoting the efficiency of resource allocation.Fourthly,after empirically analyzing that the duration and participation of taxi drivers’ labor supply are positively stimulated by wages,and conform to the prediction of the intertemporal substitution hypothesis but do not meet the income target hypothesis.Then,we further discuss whether reference-dependent preference can explain China’s labor supply decisions.Considering the income reference point as the rational expectation of decision-makers,this paper does not find any evidence that labor supply meets the preference of reference point dependence,but still meets the prediction of the intertemporal substitution theory of neoclassical economics.In a word,based on the mature and developing theories of labor supply,such as intertemporal labor supply theory,income target theory and reference dependence preference theory,this study focuses on the key issues of labor supply,such as the incentive of duration and participation,and tries to solve the typical problems of non-experimental samples in the process of empirical research,such as the endogeneity of wages,the selection of experimental group and control group to design quasi-natural experiment.Based on the micro big data of both online ride-hailing and cruising taxi drivers in Shanghai,this paper finds that the rise of temporary wage level has a positive incentive effect on the duration and participation of taxi drivers,and verifies that the mechanism of individual labor supply conforms to the explanation of intertemporal substitution theory of neoclassical economics,but does not conform to the explanations of income target or reference point dependence preference of behavioral economics.