The Wise Use of Leisure Time. A Three-Sector Endogenous Growth Model with Leisure Services

Quaderni - Working Paper DSE N° 1010

31 Pages Posted: 6 Jun 2015 Last revised: 5 May 2020

See all articles by Guido Candela

Guido Candela

University of Bologna - Department of Economics

Massimiliano Castellani

University of Bologna - Department of Economics

Roberto Dieci

Department of Mathematics, University of Bologna

Date Written: June 5, 2015

Abstract

In this paper, starting from the two-sector Uzawa-Lucas model, we study a three-sector endogenous growth model with leisure services. By extending the endogenous growth model with leisure developed by Ladrón-de Guevara et al. [1999], our model generalizes the standard time allocation problem, in that it explicitly accounts for the way total time is allocated between work, education, purely free time and time spent on leisure services, where the latter represents therefore an additional time-consuming activity. Accordingly, service consumption is tied to a production sector for leisure services in our model. We fully characterize Balanced Growth Path (BGP) equilibria in terms of time allocation and growth, and show that multiple BGPs are possible. Since service production plays an important role in economic development, we carry out a comparative analysis of the dynamic performance of different economic systems - Post-Industrial Economy vs. Service Economy - along a BGP.

Keywords: Leisure, Service Economy, Multisector Growth Model

JEL Classification: O14, O41, D90

Suggested Citation

Candela, Guido and Castellani, Massimiliano and Dieci, Roberto, The Wise Use of Leisure Time. A Three-Sector Endogenous Growth Model with Leisure Services (June 5, 2015). Quaderni - Working Paper DSE N° 1010, Available at SSRN: https://ssrn.com/abstract=2614969 or http://dx.doi.org/10.2139/ssrn.2614969

Guido Candela

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy
+39 0541 434118-9 (Phone)
+39 0541 434120 (Fax)

Massimiliano Castellani (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Roberto Dieci

Department of Mathematics, University of Bologna ( email )

Piazza di Porta San Donato, 5
Bologna, I-40126
Italy

HOME PAGE: http://www.unibo.it/Faculty/default.aspx?UPN=roberto.dieci%40unibo.it

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