Capital Utilization and the Willingness to Rest: A General Equilibrium Analysis
This paper develops a general equilibrium model acknowledging that greater capital utilization requires either longer hours or unsocial schedules. Contrary to the popular depreciation-in-use models, capital utilization does not only concern the firms' organisational choices but also labor supply behaviours, since an increase in the workweek of capital affects the households' welfare. Capital utilization and shiftworking are endogenously determined as equilibrium outcomes though - this was not the case in previous studies linking capital utilization to work conditions. A number of relevant cases where capital utilization does vary over the cycle are numerically illustrated : factor complementarity, quasi-fixity of input stocks and nominal rigidities.
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