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Preference to work and its effects on economic growth and happiness

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  • Jim Yongtao Jin
  • Geethanjali Selvaretnam

Abstract

There are circumstantial and researched evidence that people’s preferences to work differ and change. We depart from partial equilibrium models which show decisions for labour and leisure depend on their relative prices. This paper presents a simple general equilibrium framework to show that labour hours are determined by the preference to work and are independent of real wages and consumption. Moreover, the theoretical model enables us to estimate the preference to work at the macro level. A panel data analysis across countries for the years 1990 – 2018 shows with statistical significance that preference to work has been on the downward trend and has a negative relationship with GDP per capita and the ratio of wage income to GDP. Results also show that higher the preference to work, higher the GDP growth rate and lower the reported level of happiness.

Suggested Citation

  • Jim Yongtao Jin & Geethanjali Selvaretnam, 2020. "Preference to work and its effects on economic growth and happiness," Working Papers 2020_30, Business School - Economics, University of Glasgow.
    • Handle: RePEc:gla:glaewp:2020_30
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium

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