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Trends in hours and economic growth

  • L. Rachel Ngai
  • Christopher Pissarides

We study substitutions between home and market production over long periods of time. We use the results to get predictions about long-run trends in aggregate market hours of work and about employment shifts across economic sectors, driven by uneven TFP growth in market and home production. The model can rationalize the observed falling or U-shaped pattern for aggregate market hours, the complete marketization of home production in agriculture and manufacturing, and the employment shift from agriculture and manufacturing to services. We find support for the model’s predictions in long-run US data.

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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 3828.

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Date of creation: Apr 2008
Date of revision:
Publication status: Published in Review of Economic Dynamics, April, 2008, 11(2), pp. 239-256. ISSN: 1096-6099
Handle: RePEc:ehl:lserod:3828
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  1. Edward C. Prescott, 2003. "Why do Americans work so much more than Europeans?," Staff Report 321, Federal Reserve Bank of Minneapolis.
  2. Maddison, A., 1991. "A Long Run Perspective on Saving," Papers 443, Groningen State, Institute of Economic Research-.
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  12. Richard Rogerson, 2008. "Structural Transformation and the Deterioration of European Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(2), pages 235-259, 04.
  13. Ellen R. McGrattan & Richard Rogerson & Randall Wright, 1995. "An equilibrium model of the business cycle with household production and fiscal policy," Staff Report 191, Federal Reserve Bank of Minneapolis.
  14. Falvey, Rodney E & Gemmell, Norman, 1996. "Are Services Income-Elastic? Some New Evidence," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(3), pages 257-69, September.
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  20. Voth, Hans-Joachim, 1998. "Time and Work in Eighteenth-Century London," The Journal of Economic History, Cambridge University Press, vol. 58(01), pages 29-58, March.
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