| Abstract: |
During the first half of the 20th century the workweek in the United States
declined, and the distribution of hours across wage deciles narrowed. At the
same time, the distribution of wages narrowed too. The hypothesis proposed is
(i) Households have access to an increasing number of leisure activities which
enhance the value of non-market time; (ii) The rise of education accounts for
the narrowing of the wage and hours distribution. Such mechanisms, embedded
into a neoclassical growth model, quantitatively account for the observations.
The rise in wages is the main contributor to the decline in hours. The decline
in the price of leisure goods is second in importance, yet its contribution is
large. |