Rising inequality and trends in leisure

L. Rachel Ngai and Timo Boppart

No 12325, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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, work and rent capital out to the market place. 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 match 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.

Keywords: Leisure; Labor supply; Inequality; Home production; Balanced growth path (search for similar items in EconPapers)
JEL-codes: E24 J22 O41 (search for similar items in EconPapers)
Date: 2017-09
New Economics Papers: this item is included in nep-dge, nep-lma and nep-mac
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Rising inequality and trends in leisure (2021)
Working Paper: Rising inequality and trends in leisure (2021)
Working Paper: Rising inequality and trends in lesiure (2016)
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