Labor supply under wage uncertainty

We consider an agent in an atemporal setting facing an increase in the unce rtainty of her uncertain wage. More labor is supplied, given small initial wage uncertainty, by a person with a CES utility function with an elasticit y greater than unity. We relate this result to an extended measure of decre asing relative risk aversion. A Cobb-Douglas person makes no change in her labor supply in response to increased wage uncertainty. (C) 2000 Elsevier S cience S.A. All rights reserved. JEL classification J22; D81.