Search Results
Working Paper
Bundling Time and Goods: Implications for Hours Dispersion
We document the large dispersion in hours worked in the cross-section. We account for this fact using a model in which households combine market inputs and time to produce a set of nonmarket activities. To estimate the model, we create a novel data set that pairs market expenditures and time use at the activity level using data from the Consumer Expenditure Survey and the American Time Use Survey, respectively. The estimated model can account for a large fraction of the dispersion of hours worked in the data. The substitutability between market inputs and time within an activity and across a ...
Working Paper
Revisiting the role of home production in life-cycle labor supply
This paper revisits the argument, posed by Rupert, Rogerson, and Wright (2000), that estimates of the intertemporal elasticity of labor supply that do not account for home production are biased downward. The author uses the American Time Use Survey, a richer and more comprehensive data source than those used previously, to replicate their analysis, but he also explores how other factors interact with household and market work hours to affect the elasticity of labor supply. An exact replication of their analysis yields an elasticity of about 0.4, somewhat larger than previously estimated. Once ...
Working Paper
Assessing the effects of fiscal shocks
This paper investigates the response of real wages and hours worked to an exogenous shock in fiscal policy. We identify this shock with the dynamic response of government purchases and tax rates to an exogenous increase in military purchases. The fiscal shocks that we isolate are characterized by highly correlated increases in government purchases, tax rates and hours worked as well as persistent declines in real wages. We assess the ability of standard Real business Cycle models to account for these facts. They can-but only under the assumption that marginal income tax rates are constant, a ...
Report
Employment versus wage adjustment and the U.S. dollar
Using two decades of annual data, we explore the links between real exchange rates and employment, wages and overtime activity in specific U.S. manufacturing industries. Across two-digit industry levels of aggregation, exchange rate movements do not have large effects on numbers of jobs or on hours worked. More substantial effects are picked up in industry wages, especially for industries characterized by low price-over-cost markup ratios, and in overtime wages and overtime employment. The industry-by-industry pattern of wage responsiveness is not strongly related to industry export ...
Working Paper
Trends in U.S. hours and the labor wedge
From 1980 until 2007, U.S. average hours worked increased by thirteen percent, due to a large increase in female hours. At the same time, the U.S. labor wedge, measured as the discrepancy between a representative household's marginal rate of substitution between consumption and leisure and the marginal product of labor, declined substantially. We examine these trends in a model with heterogeneous households: married couples, single males and single females. Our quantitative analysis shows that the shrinking gender wage gaps and increasing labor income taxes observed in U.S. data are key ...
Working Paper
Changes in job quality and trends in labor hours
Many economic models featuring labor supply decision, especially in macroeconomic analysis, assume away heterogeneity in the nature of work, or assume that the nature of work is irrelevant to the labor/leisure choice. This paper studies the macroeconomic implications of relaxing this assumption. Estimation from micro data using labor hours, wages, consumption, and nonpecuniary job characteristics suggests that labor supply responds to differences and to changes in the nature of work. Ceteris paribus, some job characteristics induce more labor hours than others do. Labeling the jobs that embed ...
Working Paper
Hours and employment implications of search frictions: matching aggregate and establishment-level observations
This paper studies worker and job flows at the establishment and aggregate levels. The paper is built around a set of facts concerning the variability of unemployment and vacancies in the aggregate, the distribution of net employment growth and the comovement of hours and employment growth at the establishment level. A search model with frictions in hiring and firing is used as a framework to understand these observations. Notable features of this search model include non-convex costs of posting vacancies, establishment level profitability shocks and a contracting framework that determines ...
Journal Article
Does trade with low-wage countries hurt American workers?
Does trade with low-wage countries steal American jobs and, hence, rob American workers of higher wages and a higher standard of living? Most economists think trade is not guilty as charged. Instead, they cite concepts such as comparative and absolute advantage and differences in productivity to explain why trade, particularly trade with low-wage countries, doesn't pack the economic wallop its critics claim. In this article, Steve Golub shows that popular fears are based on a misunderstanding of the causes and effects of wage disparities.
Journal Article
Vacation laws and annual work hours
This article reviews the theory and evidence regarding how work hours are determined and the role of employer policies on vacation. The authors discuss possible economic rationales for vacation laws and present empirical evidence on whether they affect annual work hours. The results indicate that vacation laws lead to a substantial reduction in work hours.
Working Paper
The effect of an employer health insurance mandate on health insurance coverage and the demand for labor: evidence from Hawaii
Over the past few decades, policy makers have considered employer mandates as a strategy for stemming the tide of declining health insurance coverage. In this paper we examine the long term effects of the only employer health insurance mandate that has ever been enforced in the United States, Hawaii's Prepaid Health Care Act, using a standard supply-demand framework and Current Population Survey data covering the years 1979 to 2005. During this period, the coverage gap between Hawaii and other states increased, as did real health insurance costs, implying a rising burden of the mandate on ...