Do Technology Shocks Lead to a Fall in Total Hours Worked?
AbstractThis 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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Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 2 (2004)
Issue (Month): 2-3 (04/05)
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Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
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