Trends in Hours and Economic Growth

39 Pages Posted: 19 Apr 2006

See all articles by Christopher A. Pissarides

Christopher A. Pissarides

London School of Economics & Political Science (LSE); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Hong Kong University of Science & Technology (HKUST)

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

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Date Written: December 2005

Abstract

We study long-run trends in aggregate market hours of work and shifts across economic sectors within the context of balanced aggregate growth. We show that a model of many goods and uneven TFP growth in market and home production can rationalize the observed falling or U-shaped aggregate hours and structural change across market sectors. The dynamics of market hours are driven by substitutions between home and market production and depend critically on the existence of many market sectors. Extensions show how the model can explain rising leisure and more complex hours dynamics without violating balanced aggregate growth.

Keywords: Hours of work, labour supply, structural transformation, home production, marketization, balanced growth

JEL Classification: J21, J22, O14, O41

Suggested Citation

Pissarides, Christopher and Ngai, Liwa Rachel, Trends in Hours and Economic Growth (December 2005). CEPR Discussion Paper No. 5440. Available at SSRN: https://ssrn.com/abstract=897801

Christopher Pissarides (Contact Author)

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

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Centre for Economic Policy Research (CEPR)

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IZA Institute of Labor Economics

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Hong Kong University of Science & Technology (HKUST) ( email )

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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

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