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Leisure Time and the Sectoral Composition of Employment

Author

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  • Edgar Cruz

    () (University of Guanajuato)

  • Xavier Raurich

    () (Universitat de Barcelona)

Abstract

We observe the following patterns in the US economy during the period 1965-2015: (i) the rise of the service sector, (ii) the increase in leisure time, and (iii) the increase in recreational services. To display the last pattern, we measure the fraction of the value added of the service sector explained by the consumption of recreational services, and we show that it increases during this period. We explain these three patterns of structural change in a multisector growth model, where leisure time and the consumption of recreational services are complements. We show that this complementarity introduces a mechanism of structural change that contributes to explain the rise of the service sector and that also affects the labor supply. We measure the reduction in employment due to a tax increase to illustrate the effect on the labor supply of this mechanism.

Suggested Citation

  • Edgar Cruz & Xavier Raurich, 2018. "Leisure Time and the Sectoral Composition of Employment," UB Economics Working Papers 2018/373, Universitat de Barcelona, Facultat d'Economia i Empresa, UB Economics.
  • Handle: RePEc:ewp:wpaper:373web
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    File URL: http://hdl.handle.net/2445/120956
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    References listed on IDEAS

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    More about this item

    Keywords

    Sectoral composition; Leisure; Non-homothetic preferences; Elasticity of substitution; Biased technological progress.;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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