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Does advertising increase labour supply? Time series evidence from the UK

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  • Stuart Fraser
  • David Paton

Abstract

Wages in industrialized countries have risen considerably during the last 50 years, whereas hours worked, for manual workers at least, have decreased only marginally. In Europe, one policy response has been to attempt to protect workers from pressure to work long hours by placing legal restrictions on the amount of hours that may be worked each week. This paper examines the possibility that, in fact, observed hours may be the result of a desire of workers to work longer due to a shift in their preferences from leisure to increased consumption, caused by the huge increase in mass media advertising. A cointegrating VAR framework is used to test this hypothesis on UK time series data for both males and females from 1952 to 1997. Advertising is shown to be positively associated with hours worked for both male and female series. Causality tests indicate unidirectional causality, for males and females, from advertising to hours worked. These results suggest that the European policy response is more likely to restrict employee rather than employer discretion over hours.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684032000100346
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 35 (2003)
Issue (Month): 11 ()
Pages: 1357-1368

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Handle: RePEc:taf:applec:v:35:y:2003:i:11:p:1357-1368

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References

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  1. Johansen, Soren, 1995. "Identifying restrictions of linear equations with applications to simultaneous equations and cointegration," Journal of Econometrics, Elsevier, vol. 69(1), pages 111-132, September.
  2. Taylor, Lester D & Weiserbs, Daniel, 1972. "Advertising and the Aggregate Consumption Function," American Economic Review, American Economic Association, vol. 62(4), pages 642-55, September.
  3. David George, 1997. "Working Longer Hours: Pressure from the Boss or Pressure from the Marketers?," Review of Social Economy, Taylor & Francis Journals, vol. 55(1), pages 33-65.
  4. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  5. Ashley, R & Granger, C W J & Schmalensee, R, 1980. "Advertising and Aggregate Consumption: An Analysis of Causality," Econometrica, Econometric Society, vol. 48(5), pages 1149-67, July.
  6. Phillips, Peter C B, 1996. "Econometric Model Determination," Econometrica, Econometric Society, vol. 64(4), pages 763-812, July.
  7. Hiro Y. Toda & Peter C.B. Phillips, 1991. "Vector Autoregression and Causality," Cowles Foundation Discussion Papers 977, Cowles Foundation for Research in Economics, Yale University.
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Cited by:
  1. Baker Matthew J. & George Lisa M, 2010. "The Role of Television in Household Debt: Evidence from the 1950's," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-38, May.
  2. Benedetto Molinari & Francesco Turino, 2009. "Advertising and Business Cycle Fluctuations," Working Papers. Serie AD 2009-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Lonnie Golden, 2009. "A Brief History of Long Work Time and the Contemporary Sources of Overwork," Journal of Business Ethics, Springer, vol. 84(2), pages 217-227, January.
  4. Benedetto Molinari & Francesco Turino, 2009. "Advertising, Labor Supply and the Aggregate Economy. A long run Analysis," Working Papers 09.16, Universidad Pablo de Olavide, Department of Economics.

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