On the value(s) of time: Workers' value of their time depends on mode of valuation

In this paper, we investigate how individuals make time-money tradeoffs in labor contexts in which they are either asked to work to earn money or to pay money to avoid work. Theory predicts that exchange rates between time and money are invariant to the elicitation method. Results from our experiments, however, show otherwise, highlighting inconsistencies in how individuals consider their time. In the first two experiments, participants work to earn money, and we compare two incentivized elicitation methods. In the first, "Fixed-Time mode," we fix the amount of time participants need to work and elicit the minimum dollar amount they require to do the job. In the second, "Fixed-Money mode," we fix the amount of money we pay participants and ask for the maximum amount of time they are willing to work for that pay. We similarly vary elicitation procedures in Experiment 3 for paying money to avoid work. Translating the results into pay per hour, we find that in Fixed-Time mode, valuation of time is stable across durations, based on an analytical approach. By contrast, in Fixed-Money mode, participants increase their pay-per-hour demand when the amount of money increases, indicating a less calculated and more emotional view of time. Our results demonstrate that individuals' value of their time of labor can be fluid and dependent on the compensation structure. Our findings have implications for theories of time valuation in the labor market.