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Trends in Hours and Economic Growth

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  • Ngai, L. Rachel

    (London School of Economics)

  • Pissarides, Christopher A.

    (London School of Economics)

Abstract

We study long-run trends in market hours of work and employment shifts across economic sectors driven by uneven TFP growth in market and home production. We focus on the substitutions between market and home production and on the structural transformation between agriculture, manufacturing and services. The model can rationalize the observed falling or U-shaped pattern for aggregate hours, the complete marketization of agriculture and manufacturing, and the shift from agriculture to services without violating balanced aggregate growth. We find support for the model’s predictions in long-run US data.

Suggested Citation

  • Ngai, L. Rachel & Pissarides, Christopher A., 2007. "Trends in Hours and Economic Growth," IZA Discussion Papers 2540, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2540
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    More about this item

    Keywords

    balanced growth; home production; labour supply; structural transformation; hours of work; marketization;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • 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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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