Trends in Hours and Economic Growth
34 Pages Posted: 17 Jan 2007
Date Written: January 2007
We study long-run trends in market hours of work and employment shifts across economic sectors driven by uneven TFP growth in market and home production. We focus on the substitutions between market and home production and on the structural transformation between agriculture, manufacturing and services. The model can rationalize the observed falling or U-shaped pattern for aggregate hours, the complete marketization of agriculture and manufacturing, and the shift from agriculture to services without violating balanced aggregate growth. We find support for the model's predictions in long-run US data.
Keywords: hours of work, labour supply, structural transformation, home production, marketization, balanced growth
JEL Classification: J21, J22, O14, O41
Suggested Citation: Suggested Citation