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Work Hours, Social Value of Leisure and Globalisation

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Author Info

  • Hansen, Jørgen Drud

    ()
    (Department of Economics, Aarhus School of Business)

  • Molana, Hassan

    (University of Dundee)

  • Montagna, Catia

    (University of Dundee)

  • Ulff-Møller Nielsen, Jørgen

    ()
    (Department of Economics, Aarhus School of Business)

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 workers 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

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 10-4.

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Length: 32 pages
Date of creation: 01 Jan 2010
Date of revision:
Handle: RePEc:hhs:aareco:2010_004

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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Keywords: coordination; corporatism; openness; capital mobility; social multiplier; welfare; work hours;

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  1. Daniels, Joseph P. & Nourzad, Farrokh & VanHoose, David D., 2006. "Openness, centralized wage bargaining, and inflation," European Journal of Political Economy, Elsevier, vol. 22(4), pages 969-988, December.
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  10. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
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  13. Andrzej Grodner & Thomas J. Kniesner, 2003. "Social Interaction in Labor Supply," Center for Policy Research Working Papers, Center for Policy Research, Maxwell School, Syracuse University 51, Center for Policy Research, Maxwell School, Syracuse University.
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Cited by:
  1. Goerke, Laszlo & Hillesheim, Inga, 2013. "Relative consumption, working time, and trade unions," Labour Economics, Elsevier, Elsevier, vol. 24(C), pages 170-179.
  2. Laszlo Goerke, 2013. "Relative Consumption and Tax Evasion," IAAEU Discussion Papers, Institute of Labour Law and Industrial Relations in the European Union (IAAEU) 201301, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

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