Regression Analysis of the Relationship between Income and Work

Abstract

This study analyzes the relationship between personal income and the usual number of hours worked per week. Labor market economics imply a positive relationship between hours worked and higher income, but also suggest a that past a specific income threshold, individuals tend to work less hours. The relationship between hours worked and personal income is modeled using data from the United States Census Bureau’s American Community Survey from 2013. Simple regression analysis tested the log of adjusted personal income against hours worked, and the multiple regression expanded this analysis to include gas utility prices, number of workers in family, food stamp assistance, and number of persons in family as variables. The simple regression model demonstrates that personal income has a positive relationship with hours worked, while the multiple regression model shows that this effect diminishes as income level increases.