The Decline of Drudgery and the Paradox of Hard Work

47 Pages Posted: 29 Jun 2014

See all articles by Brendan Epstein

Brendan Epstein

Board of Governors of the Federal Reserve System - Advanced Foreign Economies Section

Miles S. Kimball

University of Michigan at Ann Arbor - Department of Economics; University of Colorado Boulder; Center for Economic and Social Research, USC; National Bureau of Economic Research (NBER)

Date Written: June 24, 2014

Abstract

We develop a theory that focuses on the general equilibrium and long-run macroeconomic consequences of trends in job utility. Given secular increases in job utility, work hours per capita can remain approximately constant over time even if the income effect of higher wages on labor supply exceeds the substitution effect. In addition, secular improvements in job utility can be substantial relative to welfare gains from ordinary technological progress. These two implications are connected by an equation ‡flowing from optimal hours choices: improvements in job utility that have a signi…cant effect on labor supply tend to have large welfare effects.

Keywords: labor supply, work hours, drudgery, income effect, substitution effect, job utility

JEL Classification: E24, J22, O40

Suggested Citation

Epstein, Brendan and Kimball, Miles S., The Decline of Drudgery and the Paradox of Hard Work (June 24, 2014). FRB International Finance Discussion Paper No. 1106. Available at SSRN: https://ssrn.com/abstract=2459525 or http://dx.doi.org/10.2139/ssrn.2459525

Brendan Epstein (Contact Author)

Board of Governors of the Federal Reserve System - Advanced Foreign Economies Section ( email )

Washington, DC 20551
United States

Miles S. Kimball

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States
734-764-2375 (Phone)
734-764-2769 (Fax)

University of Colorado Boulder ( email )

Campus Box 256
Boulder, CO 80309
United States
303.492.8295 (Phone)
303.492.8960 (Fax)

HOME PAGE: http://www.colorado.edu/Economics/people/faculty/kimball.html

Center for Economic and Social Research, USC ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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