Cheap Thrills: the Price of Leisure and the Global Decline in Work Hours

66 Pages Posted: 24 Sep 2020 Last revised: 12 Feb 2021

See all articles by Alexandr Kopytov

Alexandr Kopytov

The University of Hong Kong - Faculty of Business and Economics

Nikolai L. Roussanov

University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

Mathieu Taschereau-Dumouchel

Cornell University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 11, 2021

Abstract

The real price of recreation goods and services has fallen dramatically over the last century.
At the same time, hours per worker have also been on a steady decline. As recreation goods
make leisure time more enjoyable, we investigate if the fall in their price has contributed to the
decline in work hours. Using aggregate data from OECD countries, as well as disaggregated
data from the United States, we provide evidence that the two are strongly related. To identify
the effect of recreation prices on hours worked, we use variation in the bundle of recreational
goods across demographic groups to instrument for the changing price of leisure faced by these
groups over time. We then construct a macroeconomic model with general preferences that
allows for trending relative prices and work hours along a balanced growth path. We estimate
the model and find that the decline in recreation prices can explain a large fraction of the global
decline in work hours.

JEL Classification: E24, J22

Suggested Citation

Kopytov, Alexandr and Roussanov, Nikolai L. and Taschereau-Dumouchel, Mathieu, Cheap Thrills: the Price of Leisure and the Global Decline in Work Hours (February 11, 2021). Available at SSRN: https://ssrn.com/abstract=3660312 or http://dx.doi.org/10.2139/ssrn.3660312

Alexandr Kopytov (Contact Author)

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Nikolai L. Roussanov

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mathieu Taschereau-Dumouchel

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

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