A Model of the Trends in Hours

22 Pages Posted: 29 Jun 2005

See all articles by Guillaume Vandenbroucke

Guillaume Vandenbroucke

Federal Reserve Banks - Federal Reserve Bank of St. Louis

Date Written: December 2006


During the first half of the 20th century the workweek in the United States declined, and its distribution across wage deciles narrowed. The hypothesis proposed is twofold. First, technological progress, through the rise of wages and the decreasing cost of recreation, made it possible for the average US worker to afford more time off from work. Second, changes in the wage distribution explain the shift in the hours distribution. A general equilibrium model is built to explore whether such mechanisms can, quantitatively, account for the observations. The model is calibrated to match moments of the US economy in 1900. It predicts the trends in hours closely, from 1900 to 1950. Counterfactual experiments show that the rise in wages is the main contributor to the decline in hours. The decline in the price of leisure goods explain 6% of the total decline in hours.

Keywords: Hours worked, leisure, home production, technological progress

JEL Classification: E24, J22, O11, O33

Suggested Citation

Vandenbroucke, Guillaume, A Model of the Trends in Hours (December 2006). Available at SSRN: https://ssrn.com/abstract=752906 or http://dx.doi.org/10.2139/ssrn.752906

Guillaume Vandenbroucke (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of St. Louis ( email )

411 Locust St
Saint Louis, MO 63011
United States
+1 314 444 8717 (Phone)

HOME PAGE: http://www.guillaumevdb.net/

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