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Work hours, social value of leisure and globalisation

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  • Hansen, Jørgen Drud
  • Molana, Hassan
  • Montagna, Catia
  • Nielsen, Jørgen Ulff-Møller

Abstract

We examine how openness interacts with the coordination of consumption–leisure decisions in determining the equilibrium working hours and wage rate when there are leisure externalities (e.g., due to social interactions). The latter are modelled by allowing a worker's marginal utility of leisure to be increasing in the leisure time taken by other workers. Coordination takes the form of internalising the leisure externality and other relevant constraints (e.g., labour demand). The extent of openness is measured by the degree of capital mobility. We find that: coordination lowers equilibrium work hours and raises the wage rate; there is a U-shaped (inverse-U-shaped) relationship between work hours (wages) and the degree of coordination; coordination is welfare improving; and, the gap between the coordinated and uncoordinated work hours (and the corresponding wage rates) is affected by the extent and nature of openness.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 41 (2012)
Issue (Month): 3 ()
Pages: 317-326

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Handle: RePEc:eee:soceco:v:41:y:2012:i:3:p:317-326

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Web page: http://www.elsevier.com/locate/inca/620175

Related research

Keywords: Coordination; Corporatism; Openness; Capital mobility; Social multiplier; Welfare; Work hours;

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References

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Cited by:
  1. Laszlo Goerke, 2013. "Relative Consumption and Tax Evasion," CESifo Working Paper Series 4077, CESifo Group Munich.
  2. Goerke, Laszlo & Hillesheim, Inga, 2013. "Relative consumption, working time, and trade unions," Labour Economics, Elsevier, vol. 24(C), pages 170-179.

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