Do we need more time for leisure?
”We need more time - more time for leisure” Linton Kwesi Jonhson used to dub. Indeed, the analysis of an OLG economy with endogenous labor supply gives some rational to the dub poet’s claims. In our setting, the golden rule is defined as the pair of capital-labour ratio and individual labour supply which maximises the steady state utility of each generation. When, other things equal, agents are motivated to work more the higher the level of wages, individual labor supply will be increasing (decreasing) in capital labor ratio according to whether the elasticity of wages per unit of labour is bigger (smaller) than the relative change of the value of the fraction of labour income saved. Hence, if the economy is dynamically efficient, agents tend to work more than in the Golden Age if the propensity to save evaluated at the golden rule is, other things equal, relatively high. Conversely, under dynamic inefficiency, they work too much if and only if the propensity to save is relatively low. For given values of the parameters determining the propensity to save, individuals in dynamic efficient (inefficient) economies work more than in the Golden Age as long as the labour share of income is sufficiently high (low). These findings appear to be of some interest with reference to the 35 hours working-week debate in Europe.
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.crenos.unica.it/
More information through EDIRC
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.:
- Wolff, Edward N, 1991. "Capital Formation and Productivity Convergence over the Long Term," American Economic Review, American Economic Association, vol. 81(3), pages 565-79, June.
- repec:wop:syecwp:9903 is not listed on IDEAS
- Geoffrey H. Kingston, 2001.
"Online Appendix to Efficient Timing of Retirement,"
kingston00, Review of Economic Dynamics.
- Jappelli, Tullio & Pagano, Marco, 1999.
"The Welfare Effects of Liquidity Constraints,"
Oxford Economic Papers,
Oxford University Press, vol. 51(3), pages 410-30, July.
- Jappelli, Tullio & Pagano, Marco, 1995. "The Welfare Effects of Liquidity Constraints," CEPR Discussion Papers 1108, C.E.P.R. Discussion Papers.
- Tullio Jappelli & Marco Pagano, 1998. "The Welfare Effects of Liquidity Constraints," CSEF Working Papers 13, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Jappelli, Tullio & Pagano, Marco, 1992.
"Saving, Growth and Liquidity Constraints,"
CEPR Discussion Papers
662, C.E.P.R. Discussion Papers.
- Rogerson, Richard, 1988.
"Indivisible labor, lotteries and equilibrium,"
Journal of Monetary Economics,
Elsevier, vol. 21(1), pages 3-16, January.
- Kingston, G, 1997.
"Efficient Timing of Retirement,"
97/01, New South Wales - School of Economics.
- Duranton, Gilles, 2001. "Endogenous labor supply, growth and overlapping generations," Journal of Economic Behavior & Organization, Elsevier, vol. 44(3), pages 295-314, March.
- Frederic S. Mishkin, 1982.
"The Real Interest Rate: A Multi-Country Empirical Study,"
NBER Working Papers
1047, National Bureau of Economic Research, Inc.
- Frederic S. Mishkin, 1984. "The Real Interest Rate: A Multi-Country Empirical Study," Canadian Journal of Economics, Canadian Economics Association, vol. 17(2), pages 283-311, May.
- Bentolila Samuel & Saint-Paul Gilles, 2003.
"Explaining Movements in the Labor Share,"
The B.E. Journal of Macroeconomics,
De Gruyter, vol. 3(1), pages 1-33, October.
- Bentollia, S. & Saint-Paul, G., 1999. "Explaining Movements in the Labor Share," Papers 9905, Centro de Estudios Monetarios Y Financieros-.
- Bentolila, Samuel & Saint-Paul, Gilles, 1998. "Explaining Movements in the Labour Share," CEPR Discussion Papers 1958, C.E.P.R. Discussion Papers.
- Samuel Bentolila & Gilles Saint Paul, 1999. "Explaining movements in the labor share," Economics Working Papers 374, Department of Economics and Business, Universitat Pompeu Fabra.
- Salvador Ortigueira, 2000.
"A dynamic analysis of an endogenous growth model with leisure,"
Springer, vol. 16(1), pages 43-62.
- Salvador Ortigueira, 1997. "A Dynamic Analysis of an Endogenous Growth Model with Leisure," Working Papers 9705, Centro de Investigacion Economica, ITAM.
- Gary Hansen, 2010.
"Indivisible Labor and the Business Cycle,"
Levine's Working Paper Archive
233, David K. Levine.
- Nancy L. Stokey & Sergio Rebelo, 1993.
"Growth Effects of Flat-Rate Taxes,"
NBER Working Papers
4426, National Bureau of Economic Research, Inc.
- Edmond S. Phelps, 1964. "Second Essay on the Golden Rule of Accumulation," Cowles Foundation Discussion Papers 173, Cowles Foundation for Research in Economics, Yale University.
- Lucas, Robert E, Jr & Rapping, Leonard A, 1969. "Real Wages, Employment, and Inflation," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 721-54, Sept./Oct.
- John M. Evans & Douglas C. Lippoldt & Pascal Marianna, 2001. "Trends in Working Hours in OECD Countries," OECD Labour Market and Social Policy Occasional Papers 45, OECD Publishing.
- Marimon, R. & Zilibotti, F., 1999.
"Employment and Distributional Effects of Restricting Working Time,"
Economics Working Papers
eco99/19, European University Institute.
- Marimon, Ramon & Zilibotti, Fabrizio, 2000. "Employment and distributional effects of restricting working time," European Economic Review, Elsevier, vol. 44(7), pages 1291-1326, June.
- Marimon, Ramon & Zilibotti, Fabrizio, 1999. "Employment and Distributional Effects of Restricting Working Time," CEPR Discussion Papers 2127, C.E.P.R. Discussion Papers.
- Abel, Andrew B, et al, 1989.
"Assessing Dynamic Efficiency: Theory and Evidence,"
Review of Economic Studies,
Wiley Blackwell, vol. 56(1), pages 1-19, January.
- Andrew B. Abel & N. Gregory Mankiw & Lawrence H. Summers & Richard J. Zeckhauser, 1986. "Assessing Dynamic Efficiency: Theory and Evidence," NBER Working Papers 2097, National Bureau of Economic Research, Inc.
- Andrew Abel & Gregory N. Mankiw & Lawrence H. Summers & Richard Zeckhauser, . "Assessing Dynamic Efficiency: Theory and Evidence," Rodney L. White Center for Financial Research Working Papers 14-88, Wharton School Rodney L. White Center for Financial Research.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Nourry, C., 1998.
"Stability of Equilibria in the Overlapping Generations Model with Endogenous Labor Supply,"
98a01, Universite Aix-Marseille III.
- Nourry, Carine, 2001. "Stability of equilibria in the overlapping generations model with endogenous labor supply," Journal of Economic Dynamics and Control, Elsevier, vol. 25(10), pages 1647-1663, October.
- Martin Feldstein & Lawrence Summers, 1977. "Is the Rate of Profit Falling?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 8(1), pages 211-228.
When requesting a correction, please mention this item's handle: RePEc:cns:cnscwp:200203. 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: (Antonello Pau)
If references are entirely missing, you can add them using this form.