The effect of working time and labor force participation on unemployment: A new argument in an old debate
This paper introduces a new argument into the theoretical literature on labor market effects of changes in working hours and labor force participation. We advance a general equilibrium model in which increased labor supply reduces unskilled unemployment via consumer demand: longer work hours and higher labor force participation imply higher incomes and less (leisure) time. In consequence, home production is reduced in favor of outsourcing domestic tasks to the market, shifting consumer demand toward unskill-intensive goods. Relative demand for unskilled labor rises and unemployment falls. Finally, we provide empirical support for the basic mechanisms of our model for Germany.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Banks, James & Blundell, Richard & Tanner, Sarah, 1998.
"Is There a Retirement-Savings Puzzle?,"
American Economic Review,
American Economic Association, vol. 88(4), pages 769-88, September.
- Axel Börsch-Supan & Reinhold Schnabel & Simone Kohnz & Giovanni Mastrobuoni, 2004.
"Micro-Modeling of Retirement Decisions in Germany,"
in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 285-344
National Bureau of Economic Research, Inc.
- Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-41, September.
- Pierre Cahuc & AndrÃ© Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, June.
- Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
- Jonathan Gruber & Kevin Milligan & David A. Wise, 2010.
"Introduction and Summary,"
in: Social Security Programs and Retirement around the World: The Relationship to Youth Employment, pages 1-45
National Bureau of Economic Research, Inc.
- J. Barkley Rosser, 2009. "Introduction," Chapters, in: Handbook of Research on Complexity, chapter 1 Edward Elgar.
- Michael Hurd & Susann Rohwedder, 2003.
"The Retirement-Consumption Puzzle: Anticipated and Actual Declines in Spending at Retirement,"
03-12, RAND Corporation Publications Department.
- Michael Hurd & Susann Rohwedder, 2003. "The Retirement-Consumption Puzzle: Anticipated and Actual Declines in Spending at Retirement," NBER Working Papers 9586, National Bureau of Economic Research, Inc.
- Michael Hurd & Susann Rohwedder, 2004. "The Retirement-Consumption Puzzle: Anticipated and Actual Declines in Spending at Retirement," Working Papers wp069, University of Michigan, Michigan Retirement Research Center.
- Michael Hurd & Susann Rohwedder, 2005. "The Retirement-Consumption Puzzle: Anticipated and Actual Declines in Spending at Retirement," Working Papers 242, RAND Corporation Publications Department.
- Tilman Bruck & John P. Haisken-De New & Klaus Zimmermann, 2006.
"Creating low skilled jobs by subsidizing market-contracted household work,"
Taylor & Francis Journals, vol. 38(8), pages 899-911.
- Tilman Brück & John P. Haisken-DeNew & Klaus F. Zimmermann, 2003. "Creating Low Skilled Jobs by Subsidising Market-Contracted Household Work," Discussion Papers of DIW Berlin 387, DIW Berlin, German Institute for Economic Research.
- Brück, Tilman & Haisken-DeNew, John P & Zimmermann, Klaus F, 2004. "Creating Low-Skilled Jobs by Subsidising Market-Contracted Household Work," CEPR Discussion Papers 4225, C.E.P.R. Discussion Papers.
- Brück, Tilman & Haisken-DeNew, John P. & Zimmermann, Klaus F., 2003. "Creating Low Skilled Jobs by Subsidizing Market-Contracted Household Work," IZA Discussion Papers 958, Institute for the Study of Labor (IZA).
- Matthias Weiss, 2004.
"Skill-Biased Technological Change: Is there Hope for the Unskilled?,"
MEA discussion paper series
04045, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
- Weiss, Matthias, 2008. "Skill-biased technological change: Is there hope for the unskilled?," Economics Letters, Elsevier, vol. 100(3), pages 439-441, September.
- Alan Manning, 2004.
"We Can Work It Out: The Impact of Technological Change on the Demand for Low-Skill Workers,"
Scottish Journal of Political Economy,
Scottish Economic Society, vol. 51(5), pages 581-608, November.
- Alan Manning, 2004. "We can work it out: the impact of technological change on the demand for low skill workers," LSE Research Online Documents on Economics 19948, London School of Economics and Political Science, LSE Library.
- Calmfors, Lars & Hoel, Michael, 1989. "Work Sharing, Employment and Shiftwork," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 758-73, October.
- Ernst Fehr & Simon Gaechter, 2000.
"Fairness and Retaliation: The Economics of Reciprocity,"
CESifo Working Paper Series
336, CESifo Group Munich.
- Ernst Fehr & Simon G�chter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
- Ernst Fehr & Simon Gaechter, . "Fairness and Retaliation: The Economics of Reciprocitys," IEW - Working Papers 040, Institute for Empirical Research in Economics - University of Zurich.
- Francesca Mazzolari & Giuseppe Ragusa, 2013.
"Spillovers from High-Skill Consumption to Low-Skill Labor Markets,"
The Review of Economics and Statistics,
MIT Press, vol. 95(1), pages 74-86, March.
- Mazzolari, Francesca & Ragusa, Giuseppe, 2007. "Spillovers from High-Skill Consumption to Low-Skill Labor Markets," IZA Discussion Papers 3048, Institute for the Study of Labor (IZA).
- Ronald Schettkat & Wiemer Salverda, 2004. "Demand Patterns and Employment Growth, Consumption and Services in France, Germany, the Netherlands, the United Kingdom and the United States," DEMPATEM Working Papers wp13, AIAS, Amsterdam Institute for Advanced Labour Studies.
- Hunt, Jennifer, 1997.
"Has Work Sharing Worked in Germany?,"
CEPR Discussion Papers
1553, C.E.P.R. Discussion Papers.
- G�ran Therborn & K.C. Ho, 2009. "Introduction," City, Taylor & Francis Journals, vol. 13(1), pages 53-62, March.
- Calmfors, Lars & Hoel, Michael, 1988. " Work Sharing and Overtime," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(1), pages 45-62.
- Daniel S. Hamermesh, 1982.
"Consumption During Retirement: The Missing Link in the Life Cycle,"
NBER Working Papers
0930, National Bureau of Economic Research, Inc.
- Hamermesh, Daniel S, 1984. "Consumption during Retirement: The Missing Link in the Life Cycle," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 1-7, February.
- Pierre Cahuc & André Zylberberg, 2008. "Reduction of working time and unemployment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00255770, HAL.
- Michele Boldrin & Juan J. Dolado & Juan F. Jimeno & Franco Peracchi, 1999. "The future of pensions in Europe," Economic Policy, CEPR;CES;MSH, vol. 14(29), pages 287-320, October.
- Giacomo Corneo, 1995. "Distributional implications of a shorter working week: An unpleasant note," Journal of Economics, Springer, vol. 62(1), pages 25-31, February.
When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:27:y:2010:i:1:p:67-82. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.