The Decline of Drudgery and the Paradox of Hard Work
Brendan Epstein () and
No 1106, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)
We develop a theory that focuses on the general equilibrium and long-run macroeconomic consequences of trends in job utility. Given secular increases in job utility, work hours per capita can remain approximately constant over time even if the income effect of higher wages on labor supply exceeds the substitution effect. In addition, secular improvements in job utility can be substantial relative to welfare gains from ordinary technological progress. These two implications are connected by an equation flowing from optimal hours choices: improvements in job utility that have a significant effect on labor supply tend to have large welfare effects.
Keywords: Labor supply; work hours; drudgery; income effect; substitution effect; job utility (search for similar items in EconPapers)
JEL-codes: E24 J22 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gro, nep-hpe, nep-lab, nep-lma, nep-mac and nep-upt
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