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A Century of Human Capital and Hours

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Author Info

  • Diego Restuccia
  • Guillaume Vandenbroucke

Abstract

An average person born in the United States in the second half of the nineteenth century completed 7 years of schooling and spent 58 hours a week working in the market. By contrast, an average person born at the end of the twentieth century completed 14 years of schooling and spent 40 hours a week working. In the span of 100 years, completed years of schooling doubled and working hours decreased by 30 percent. What explains these trends? We consider a model of human capital and labor supply to quantitatively assess the contribution of exogenous variations in productivity (wage) and life expectancy in accounting for the secular trends in educational attainment and hours of work. We find that the observed increase in wages and life expectancy account for 80 percent of the increase in years of schooling and 88 percent of the reduction in hours of work. Rising wages alone account for 75 percent of the increase in schooling and almost all the decrease in hours in the model, whereas rising life expectancy alone accounts for 25 percent of the increase in schooling and almost none of the decrease in hours of work. In addition, we show that the mechanism emphasized in the model is consistent with other trends at a more disaggregate level such as the reduction in the racial gap in schooling and the decrease in the cross-sectional dispersion in hours.

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File URL: http://www.economics.utoronto.ca/public/workingPapers/tecipa-460.pdf
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Bibliographic Info

Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-460.

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Length: Unknown pages
Date of creation: 09 Jul 2012
Date of revision:
Handle: RePEc:tor:tecipa:tecipa-460

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Related research

Keywords: Schooling; hours of work; productivity; life expectancy; trends; United States;

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References

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  1. Guillaume Vandenbroucke, 2005. "Trend in Hours: The U.S. from 1900 to 1950," Economie d'Avant Garde Research Reports 11, Economie d'Avant Garde, revised Nov 2005.
  2. Andres Erosa & Tatyana Koreshkova & Diego Restuccia, 2009. "How Important is Human Capital? A Quantitative Theory Assessment of World Income Inequality," Working Papers 09007, Concordia University, Department of Economics, revised Mar 2009.
  3. Diego Restuccia & Guillaume Vandenbroucke, 2010. "The Evolution of Education: A Macroeconomic Analysis," Working Papers tecipa-388, University of Toronto, Department of Economics.
  4. Karen A. Kopecky, 2006. "The Trend in Retirement," 2006 Meeting Papers 187, Society for Economic Dynamics.
  5. Jeremy Greenwood & Guillaume Vandenbroucke, 2005. "Hours Worked (Long-Run Trends)," Economie d'Avant Garde Research Reports 10, Economie d'Avant Garde.
  6. John W. Kendrick, 1961. "Productivity Trends in the United States," NBER Books, National Bureau of Economic Research, Inc, number kend61-1, October.
  7. Diego Restuccia & Guillaume Vandenbroucke, 2011. "Explaining Educational Attainment across Countries and over Time," Working Papers tecipa-433, University of Toronto, Department of Economics.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. A Century of Human Capital and Hours
    by Christian Zimmermann in NEP-DGE blog on 2012-04-01 16:01:14
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Cited by:
  1. Carl-Johan Dalgaard & Holger Strulik, 2012. "The Genesis of the Golden Age - Accounting for the Rise in Health and Leisure," Discussion Papers 12-10, University of Copenhagen. Department of Economics.
  2. Diego Restuccia & Guillaume Vandenbroucke, 2013. "Explaining Educational Attainment across Countries and over Time," Working Papers tecipa-469, University of Toronto, Department of Economics.

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