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Home Productivity

  • Benjamin Bridgman

    (Bureau of Economic Analysis)

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.

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Paper provided by Bureau of Economic Analysis in its series BEA Working Papers with number 0091.

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Date of creation: Feb 2013
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Handle: RePEc:bea:wpaper:0091
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