Rising inequality and trends in leisure

Boppart, Timo and Ngai, L. Rachel ORCID: 0009-0005-1605-856X (2021) Rising inequality and trends in leisure. Journal of Economic Growth, 26 (2). 153 – 185. ISSN 1381-4338

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Abstract

This paper develops a model that generates rising average leisure time and increasing leisure inequality along a path of balanced growth. Households derive utility from three sources: market goods, home goods and leisure. Home production and leisure are both activities that require time and capital. Households allocate time and capital to these non-market activities and supply labor. The dynamics are driven by activity-specific TFP growth and a spread in the distribution of household-specific labor market efficiencies. When the spread is set to replicate the increase in wage inequality across education groups, the model can account for the observed average time series and cross-sectional dynamics of leisure time in the U.S. over the last five decades.

Item Type:	Article
Official URL:	https://www.springer.com/journal/10887
Additional Information:	© 2021 The Authors
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HB Economic Theory
JEL classification:	O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J22 - Time Allocation and Labor Supply E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Macroeconomics: Employment; Unemployment; Wages; Intergenerational Income Distribution (includes wage indexation)
Date Deposited:	01 Mar 2021 09:54
Last Modified:	12 Dec 2024 02:27
URI:	http://eprints.lse.ac.uk/id/eprint/108919

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