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Trends in hours and economic growth

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  • Ngai, L. Rachel
  • Pissarides, Christopher

Abstract

We study long-run trends in aggregate market hours of work and shifts across economic sectors within the context of balanced aggregate growth. We show that a model of many goods and uneven TFP growth in market and home production can rationalize the observed falling or U-shaped aggregate hours and structural change across market sectors. The dynamics of market hours are driven by substitutions between home and market production and depend critically on the existence of many market sectors. Extensions show how the model can explain rising leisure and more complex hours dynamics without violating balanced aggregate growth.

Suggested Citation

  • Ngai, L. Rachel & Pissarides, Christopher, 2006. "Trends in hours and economic growth," LSE Research Online Documents on Economics 4462, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:4462
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    References listed on IDEAS

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    More about this item

    Keywords

    hours of work; labour supply; structural transformation; home production; marketization; balanced growth;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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