Average Work Hours as a Leading Economic Variable in U.S. Manufacturing


Posted: 6 Dec 1996

See all articles by Lonnie Golden

Lonnie Golden

Pennsylvania State University - Abington College; Economic Policy Institute; Project for Middle Class Renewal

Stuart Glosser

University of Wisconsin at Whitewater


**Below is a description of the paper and not the actual abstract.** This paper examines the role of the average workweek in U.S. manufacturing industries as a leading indicator. Our analysis investigates the relationship between average weekly hours of production workers in manufacturing, a leading indicator, and both employment of production workers in manufacturing and manufacturing output, which are coincident indicators. A separate VAR system hours, employment, output and real earnings is estimated for the aggregate, durable and non- durable manufacturing sectors as well as for sixteen of the twenty 2-digit SIC manufacturing industries. Tests for structural change show a structural break occurred after 1978. Granger causality tests and impulse response analysis both show that the impact of average and overtime hours on employment and industrial output became considerably weaker after the structural break point. In the period 1979 to 1993, considerably fewer detailed industries exhibit significant impulse responses of employment and output to a unit shock in hours as compared to the period 1954 to 1978. Our results imply that a given change in hours is now leading to smaller changes in subsequent employment levels. In general, the average workweek length in U.S. manufacturing has become less associated with the entire business cycle.

JEL Classification: J23, J22, E32, E37, E24

Suggested Citation

Golden, Lonnie and Glosser, Stuart, Average Work Hours as a Leading Economic Variable in U.S. Manufacturing. INTERNATIONAL JOURNAL OF FORECASTING, Available at SSRN: https://ssrn.com/abstract=3569

Lonnie Golden (Contact Author)

Pennsylvania State University - Abington College ( email )

1600 Woodland Rd.
Abington, PA 19001
United States
215-881-7596 (Phone)
215-881-7333 (Fax)

Economic Policy Institute ( email )

1660 L Street NW, Suite 1200
Washington, DC 20036
United States

Project for Middle Class Renewal ( email )

1408 W. Gregory Dr.
Urbana, IL 61801
United States

Stuart Glosser

University of Wisconsin at Whitewater ( email )

800 W. Main
Whitewater, WI 53190
United States

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