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Much Work in a Leisure-Intensive Economy: Why Keynes Was Both Right and Wrong

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  • Dimitry Rtischev

Abstract

A simple analytical model is used to examine how rising labor productivity reduces working time in an economy of agents who are both workers and consumers. The model endogenizes the feedback from leisure to employment due to the demand for leisure-complementing goods by consumers. It is found that the rate at which rising labor productivity is translated into leisure is not nearly as fast as Keynes had predicted under the assumption that leisure is solely a residual outcome of economic activity rather than also a stimulant of demand and employment. Keynes was right to forecast a leisure-intensive economy, but wrong to neglect the consequences of leisure for work.

Suggested Citation

  • Dimitry Rtischev, 2025. "Much Work in a Leisure-Intensive Economy: Why Keynes Was Both Right and Wrong," Gakushuin Economic Papers, Gakushuin University, Faculty of Economics, vol. 61(4), pages 267-282.
    • Handle: RePEc:abc:gakuep:61-4-3
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    File URL: https://www.gakushuin.ac.jp/univ/eco/gakkai/pdf_files/keizai_ronsyuu/contents/contents2024/6104/6104_rtischev/6104_rtischev.pdf
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    More about this item

    Keywords

    leisure time; labor productivity; technological innovation; employment;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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