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Trends in Hours and Economic Growth

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  • Pissarides, Christopher
  • Ngai, Liwa Rachel

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.

Suggested Citation

  • Pissarides, Christopher & Ngai, Liwa Rachel, 2005. "Trends in Hours and Economic Growth," CEPR Discussion Papers 5440, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:5440
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    More about this item

    Keywords

    Hours of work; Labour supply; Structural transformation; Home production; Marketization; Balanced growth;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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