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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. Steven J. Davis & Magnus Henrekson, 2004. "Tax Effects on Work Activity, Industry Mix and Shadow Economy Size: Evidence from Rich-Country Comparisons," NBER Working Papers 10509, National Bureau of Economic Research, Inc.
  2. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2005. "Work and Leisure in the U. S. and Europe: Why so Different?," Harvard Institute of Economic Research Working Papers 2068, Harvard - Institute of Economic Research.
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  8. Joseph P. Daniels & Farrokh Nourzad & David D. VanHoose, 2005. "Openness, Centralized Wage Bargaining, and Inflation," Working Papers and Research 0505, Marquette University, Center for Global and Economic Studies and Department of Economics.
  9. Conny Olovsson, 2009. "Why Do Europeans Work So Little?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 39-61, 02.
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  13. Richard Rogerson, 2007. "Taxation and Market Work: Is Scandinavia an Outlier?," NBER Working Papers 12890, National Bureau of Economic Research, Inc.
  14. Andrzej Grodner & Thomas J. Kniesner, 2003. "Social Interaction in Labor Supply," Center for Policy Research Working Papers 51, Center for Policy Research, Maxwell School, Syracuse University.
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Cited by:
  1. Inga Hillesheim & Laszlo Goerke, 2013. "Relative Consumption, Working Time, and Trade Unions," IAAEU Discussion Papers 201310, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  2. Laszlo Goerke, 2013. "Relative Consumption and Tax Evasion," CESifo Working Paper Series 4077, CESifo Group Munich.

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