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Home productivity

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  • Bridgman, Benjamin

Abstract

This paper documents novel facts about the household sector to guide macroeconomic modeling, including the first estimates of aggregate U.S. home productivity. I derive the theoretically correct prices required to impute home production value added and productivity and apply this method to estimate annual U.S. home production accounts from 1929 to 2010. Both labor productivity and technical change grew steadily after World War Two, but slowed after the late-1970s. Capital intensity increased in the late-1970s due to increased consumer durables holdings, suggesting that the home production function must allow for more substitutability between capital and labor than Cobb–Douglas. Including home production significantly reduces the shift from goods to services production relative to published GDP. The productivity slowdown coincides with a shift to market services, suggesting that it was slower – not faster – home productivity that encouraged shifting production out of the home.

Suggested Citation

  • Bridgman, Benjamin, 2016. "Home productivity," Journal of Economic Dynamics and Control, Elsevier, vol. 71(C), pages 60-76.
  • Handle: RePEc:eee:dyncon:v:71:y:2016:i:c:p:60-76
    DOI: 10.1016/j.jedc.2016.08.003
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    Cited by:

    1. Fabio Cerina & Alessio Moro & Michelle Rendall, 2021. "The Role Of Gender In Employment Polarization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(4), pages 1655-1691, November.
    2. Timo Boppart & L. Rachel Ngai, 2021. "Rising inequality and trends in leisure," Journal of Economic Growth, Springer, vol. 26(2), pages 153-185, June.
    3. L. Rachel Ngai & Barbara Petrongolo, 2017. "Gender Gaps and the Rise of the Service Economy," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 1-44, October.
    4. Claudia Olivetti & Rachel Ngai, 2015. "Structural Transformation and the U-Shaped Female Labor Supply," 2015 Meeting Papers 1501, Society for Economic Dynamics.
    5. Bridgman, Benjamin & Duernecker, Georg & Herrendorf, Berthold, 2018. "Structural transformation, marketization, and household production around the world," Journal of Development Economics, Elsevier, vol. 133(C), pages 102-126.
    6. Bridgman, Benjamin, 2022. "Is Productivity On Vacation? The Impact Of The Digital Economy On The Value Of Leisure," Macroeconomic Dynamics, Cambridge University Press, vol. 26(1), pages 127-148, January.
    7. Dürnecker, Georg & Herrendorf, Berthold, 2014. "On the Allocation of Time," Working Papers 14-09, University of Mannheim, Department of Economics.
    8. Fang, Lei & Zhu, Guozhong, 2017. "Time allocation and home production technology," Journal of Economic Dynamics and Control, Elsevier, vol. 78(C), pages 88-101.
    9. Benjamin Bridgman, 2016. "Engines of Leisure," BEA Working Papers 0137, Bureau of Economic Analysis.
    10. So Kubota, 2020. "Culture, Gender, and Structural Transformation: The Case of Turkey," Working Papers 1925, Waseda University, Faculty of Political Science and Economics.
    11. Alessio Moro & Solmaz Moslehi & Satoshi Tanaka, 2017. "Does Home Production Drive Structural Transformation?," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(3), pages 116-146, July.
    12. Bednar, W.L. & Pretnar, Nick, 2023. "Structural Change with Time to Consume," MPRA Paper 118167, University Library of Munich, Germany.
    13. Michelle Rendall, 2018. "Female Market Work, Tax Regimes, and the Rise of the Service Sector," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 28, pages 269-289, April.
    14. Duernecker, Georg & Herrendorf, Berthold, 2018. "On the allocation of time – A quantitative analysis of the roles of taxes and productivities," European Economic Review, Elsevier, vol. 102(C), pages 169-187.
    15. Moro, Alessio & Tanaka, Satoshi, 2019. "Sectoral shocks and home substitution," Economics Letters, Elsevier, vol. 181(C), pages 57-60.
    16. Song, Chen & Wei, Chao, 2018. "Travel time use over five decades," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 73-96.
    17. Andreas Chai, 2018. "Household consumption patterns and the sectoral composition of growing economies: A review of the interlinkages," Discussion Papers in Economics economics:201802, Griffith University, Department of Accounting, Finance and Economics.
    18. Olovsson, Conny, 2015. "Optimal taxation with home production," Journal of Monetary Economics, Elsevier, vol. 70(C), pages 39-50.

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    More about this item

    Keywords

    Household production; Labor productivity; Technical change; Structural change;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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