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The dynamics of hours worked and technology

  • Cristiano Cantore

    ()

    (University of Surrey)

  • Filippo Ferroni

    ()

    (Banque de France, University of Surrey)

  • Miguel A. León-Ledesma

    ()

    (University of Kent)

We study the relationship between hours worked and technology during the postwar period in the US. We show that the responses of hours to technological improvements have increased over time, and that the patterns captured by the SVAR are consistent with those obtained from an RBC model with a less than unitary elasticity of substitution between capital and labor. Data supports the hypothesis that the observed changes in the response of hours to a technology shock are attributable to changes in the magnitude of the degree of capital-labor substitution. We argue that the observed time-variation in can arise from changes in the structural composition of sectors (or factors) in a heterogeneous inputs production function or from biases in technological change

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Paper provided by Banco de España & Working Papers Homepage in its series Working Papers with number 1238.

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Length: 33 pages
Date of creation: Nov 2012
Date of revision:
Handle: RePEc:bde:wpaper:1238
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