Changes in job quality and trends in labor hours

Brahima Coulibaly

No 882, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: 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 the labor-inducing characteristics as better quality jobs, the study estimates a Job Quality index for the aggregate U.S. economy from 1850 to 2000. The results suggest that over the same period, improvements in Job Quality accounted for at least 20.4 percent of growth in labor hours.

Keywords: Labor supply; Labor economics; Hours of labor (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:882

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