Rising Inequality and Trends in Leisure

56 Pages Posted: 26 Sep 2017

See all articles by Timo Boppart

Timo Boppart

Stockholm University - Institute for International Economic Studies (IIES); University of Zurich - Department of Economics

Rachel Ngai

London School of Economics & Political Science (LSE) - Department of Economics; Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management

Date Written: September 2017

Abstract

This paper develops a model that generates rising average leisure time and increasing leisure inequality along a path of balanced growth. Households derive utility from three sources: market goods, home goods and leisure. Home production and leisure are both activities that require time and capital. Households allocate time and capital to these non-market activities, work and rent capital out to the market place. The dynamics are driven by activity-specific TFP growth and a spread in the distribution of household-specific labor market efficiencies. When the spread is set to match the increase in wage inequality across education groups, the model can account for the observed average time series and cross-sectional dynamics of leisure time in the U.S. over the last five decades.

Keywords: balanced growth path, Home Production, inequality, Labor Supply, leisure

JEL Classification: E24, J22, O41

Suggested Citation

Boppart, Timo and Ngai, Liwa Rachel, Rising Inequality and Trends in Leisure (September 2017). CEPR Discussion Paper No. DP12325. Available at SSRN: https://ssrn.com/abstract=3042638

Timo Boppart (Contact Author)

Stockholm University - Institute for International Economic Studies (IIES) ( email )

Stockholm, SE-10691
Sweden

University of Zurich - Department of Economics ( email )

Z├╝rich, CH-8006
Switzerland

Liwa Rachel Ngai

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 207 955 7017 (Phone)
+44 207 831 1840 (Fax)

Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management ( email )

Clear Water Bay
Kowloon
Hong Kong

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
215
PlumX Metrics