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Do Technology Shocks Lead to a Fall in Total Hours Worked?

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Author Info
Harald Uhlig (Humboldt University Berlin, University of Tilburg, and CEPR,)

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Abstract

This paper contributes to the debate initiated by Galí in 1999. I provide a theory with capital income taxation, labor hoarding as well as long-run shifts in the social attitudes to the workplace-modelled as "leisure at the workplace"-to argue that there are other shocks that may influence labor productivity in the long run. I introduce "medium-run identification" and show it to be superior to long-run identification or standard short-run identification, when applied to artificial data. With U.S. data and medium-run identification, I find the robust result that technology shocks lead to a hump-shaped response of total hours worked, which is mildly positive following a near-zero initial response. (JEL: E32, E24, C32, C15) Copyright (c) 2004 The European Economic Association.

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Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 2 (2004)
Issue (Month): 2-3 (04/05)
Pages: 361-371
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Handle: RePEc:tpr:jeurec:v:2:y:2004:i:2-3:p:361-371

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