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A Century of Human Capital and Hours

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  • 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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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
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Handle: RePEc:tor:tecipa:tecipa-460

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

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References

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  1. Diego Restuccia & Guillaume Vandenbroucke, 2013. "Explaining Educational Attainment across Countries and over Time," Working Papers, University of Toronto, Department of Economics tecipa-469, University of Toronto, Department of Economics.
  2. Diego Restuccia & Guillaume Vandenbroucke, 2013. "The Evolution Of Education: A Macroeconomic Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54, pages 915-936, 08.
  3. Guillaume Vandenbroucke, 2005. "Trend in Hours: The U.S. from 1900 to 1950," Economie d'Avant Garde Research Reports, Economie d'Avant Garde 11, Economie d'Avant Garde, revised Nov 2005.
  4. Karen A. Kopecky, 2011. "The Trend In Retirement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 287-316, 05.
  5. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," Department of Economics Working Papers, Department of Economics, Williams College 2002-09, Department of Economics, Williams College.
  6. Jeremy Greenwood & Guillaume Vandenbroucke, 2005. "Hours Worked (Long-Run Trends)," Economie d'Avant Garde Research Reports, Economie d'Avant Garde 10, Economie d'Avant Garde.
  7. Andres Erosa & Tatyana Koreshkova & Diego Restuccia, 2009. "How Important is Human Capital? A Quantitative Theory Assessment of World Income Inequality," Working Papers, Concordia University, Department of Economics 09007, Concordia University, Department of Economics, revised Mar 2009.
  8. John W. Kendrick, 1961. "Productivity Trends in the United States," NBER Books, National Bureau of Economic Research, Inc, number kend61-1, July.
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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. Diego Restuccia & Guillaume Vandenbroucke, 2014. "Explaining Educational Attainment across Countries and over Time," Working Papers, University of Toronto, Department of Economics tecipa-507, University of Toronto, Department of Economics.
  2. 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.

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