Search Results
Working Paper
Product market regulation and market work: a benchmark analysis
Recent empirical work finds a negative correlation between product market regulation and aggregate employment. We examine the effect of product market regulations on hours worked in a benchmark aggregate model of time allocation as well as in a standard dynamic model of entry and exit. We find that product market regulations affect time devoted to market work in effectively the same fashion that taxes on labor income or consumption do. In particular, if product market regulations are to affect aggregate market work in this model, the key driving force is the size of income transfers ...
Working Paper
Long-term changes in labor supply and taxes: evidence from OECD countries, 1956-2004
We document large differences in trend changes in hours worked across OECD countries over the period 1956-2004. We then assess the extent to which these changes are consistent with the intratemporal first order condition from the neoclassical growth model. We find large and trending deviations from this condition, and that the model can account for virtually none of the changes in hours worked. We then extend the model to incorporate observed changes in taxes. Our findings suggest that taxes can account for much of the variation in hours worked both over time and across countries.
Journal Article
After 40 Years, How Representative Are Labor Market Outcomes in the NLSY79?
In 1979, the National Longitudinal Study of Youth 1979 (NLSY79) began following a group of U.S. residents born between 1957 and 1964 and has continued to reinterview these same individuals for more than four decades. Despite this long sampling period, attrition remains modest. This article shows that after 40 years of data collection, the remaining NLSY79 sample continues to be broadly representative of their national cohorts regarding key labor market outcomes. For NLSY79 age cohorts, life-cycle profiles of employment, hours worked, and earnings are comparable to those in the Current ...
Briefing
Goodfriend Memorial Lecture: Productivity and Structural Change
Introduced in 2023, the Goodfriend Memorial Lecture series honors the legacy of Marvin Goodfriend, long-time Richmond Fed economist, research director and senior policy advisor. The lecture was delivered as part of the Richmond Fed's Collaboration of Research Economists (CORE) Week model, which brings together Richmond Fed economists and visiting economists from a range of disciplines for seminars, conferences, networking and collaboration.
Working Paper
Hours Worked and Lifetime Earnings Inequality
We document large differences in lifetime hours of work using data from the NLSY79 and argue that these differences are an important source of inequality in lifetime earnings. To establish this we develop and calibrate a rich heterogeneous agent model of labor supply and human capital accumulation that allows for heterogeneity in preferences for work, initial human capital and learning ability, as well as idiosyncratic shocks to human capital throughout the life-cycle. Our calibrated model implies that almost 20 percent of the variance in lifetime earnings is accounted for by differences in ...
Working Paper
The business cycle and the life cycle
The paper documents how cyclical fluctuations in market work vary over the life cycle and then assesses the predictions of a life-cycle version of the growth model for those observations. The analysis yields a simple but striking finding. The main discrepancy between the model and that data lies in the inability of the model to account for fluctuations in hours for individuals in the first half of their life cycle. The predictions for those in the latter half of the life cycle are quite close to the data.
Journal Article
The employment of nations — a primer
This paper examines low-frequency movements in employment in a cross-section of industrialized countries for the period 1960?95, using both aggregate and disaggregated data. It documents nine stylized facts about cross-country variations in employment.
Journal Article
Household production and development
The authors introduce home production into the neoclassical growth model and examine its consequences for development economics. They focus on how well differences in policies that distort capital accumulation explain international income differences. In models with home production, such policies not only reduce capital accumulation, they also change the mix of market and nonmarket activity; therefore, for a given policy differential, these models generate larger differences in output than standard models. The authors show that policy differences? welfare implications (hence the welfare ...
Journal Article
Changes in hours worked, 1950?2000
This article describes changes in the number of average weekly hours of market work per person in the United States since World War II. Overall, this number has been roughly constant; for various groups, however, it has shifted dramatically - from males to females, from older people to younger people, and from single- to married-person households. The article provides a detailed look at how the lifetime pattern of work hours has changed since 1950 for different demographic groups. This article also documents several factors that lead to the reallocation of hours worked across groups: ...
Report
Estimating substitution elasticities in household production models
Dynamic general equilibrium models that include explicit household production sectors provide a useful framework within which to analyze a variety of macroeconomic issues. However, some implications of these models depend critically on parameters, including the elasticity of substitution between market and home consumption goods, about which there is little information in the literature. Using the PSID, we estimate these parameters for single males, single females, and married couples. At least for single females and married couples, the results indicate a high enough substitution elasticity ...