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The Decline of Drudgery and the Paradox of Hard Work

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  • Epstein, Brendan

    ()
    (Board of Governors of the Federal Reserve System (U.S.))

  • Kimball, Miles S.

    ()
    (University of Michigan)

Abstract

We develop a theory that focuses on the general equilibrium and long-run macroeconomic consequences of trends in job utility. Given secular increases in job utility, work hours per capita can remain approximately constant over time even if the income effect of higher wages on labor supply exceeds the substitution effect. In addition, secular improvements in job utility can be substantial relative to welfare gains from ordinary technological progress. These two implications are connected by an equation flowing from optimal hours choices: improvements in job utility that have a significant effect on labor supply tend to have large welfare effects.

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Bibliographic Info

Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series International Finance Discussion Papers with number 1106.

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Length: 42 pages
Date of creation: 06 Jun 2014
Date of revision:
Handle: RePEc:fip:fedgif:1106

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Related research

Keywords: Labor supply; work hours; drudgery; income effect; substitution effect; job utility;

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References

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  1. The degradation of middle-class work
    by chris dillow in Stumbling and Mumbling on 2014-07-08 13:44:29

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