Lifetime aggregate labor supply with endogenous workweek length

Edward C. Prescott; Richard Rogerson; Johanna Wallenius

doi:10.1016/j.red.2008.07.005

Lifetime aggregate labor supply with endogenous workweek length

Edward C. Prescott
, Richard Rogerson
, Johanna Wallenius

Research output: Contribution to journal › Article › peer-review

51 Scopus citations

Abstract

This paper studies lifetime aggregate labor supply with endogenous workweek length. Such a theory is needed to evaluate various government policies. A key feature of our model is a nonlinear mapping from hours worked to labor services. This gives rise to an endogenous workweek that can differ across occupations. The theory determines what fraction of the lifetime an individual works, not when. We find that constraints on workweek length have different consequences for total hours than for total labor services. Also, we find that policies designed to increase the length of the working life may not increase aggregate lifetime labor supply.

Original language	English (US)
Pages (from-to)	23-36
Number of pages	14
Journal	Review of Economic Dynamics
Volume	12
Issue number	1
DOIs	https://doi.org/10.1016/j.red.2008.07.005
State	Published - Jan 2009
Externally published	Yes

All Science Journal Classification (ASJC) codes

Economics and Econometrics

Keywords

Lifetime aggregate labor supply
Workweek length

Access to Document

10.1016/j.red.2008.07.005

Cite this

@article{a0af78d7e9e64cd48c337b06c83f7d84,

title = "Lifetime aggregate labor supply with endogenous workweek length",

abstract = "This paper studies lifetime aggregate labor supply with endogenous workweek length. Such a theory is needed to evaluate various government policies. A key feature of our model is a nonlinear mapping from hours worked to labor services. This gives rise to an endogenous workweek that can differ across occupations. The theory determines what fraction of the lifetime an individual works, not when. We find that constraints on workweek length have different consequences for total hours than for total labor services. Also, we find that policies designed to increase the length of the working life may not increase aggregate lifetime labor supply.",

keywords = "Lifetime aggregate labor supply, Workweek length",

author = "Prescott, \{Edward C.\} and Richard Rogerson and Johanna Wallenius",

note = "Funding Information: ✩ Prescott thanks the National Science Foundation (Grant 0422539), Rogerson thanks the National Science Foundation (Grant 0417822) and Wallenius thanks the Yrjo Jahnsson Foundation for supporting the research. We also thank our colleagues with whom we discussed this research, as well as an anonymous referee for useful comments. We want to thank Simona Cociuba for providing exceptional research assistance. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. * Corresponding author at: Arizona State University, Department of Economics, PO 873806, Tempe, AZ, USA. E-mail address: [email protected] (E.C. Prescott). 1 Rosen (1978) also noted that this formulation was a tractable way to think about intensive and extensive margins of labor supply. See also the discussion in Barzel (1973).",

year = "2009",

month = jan,

doi = "10.1016/j.red.2008.07.005",

language = "English (US)",

volume = "12",

pages = "23--36",

journal = "Review of Economic Dynamics",

issn = "1094-2025",

publisher = "Academic Press Inc.",

number = "1",

}

TY - JOUR

T1 - Lifetime aggregate labor supply with endogenous workweek length

AU - Prescott, Edward C.

AU - Rogerson, Richard

AU - Wallenius, Johanna

N1 - Funding Information: ✩ Prescott thanks the National Science Foundation (Grant 0422539), Rogerson thanks the National Science Foundation (Grant 0417822) and Wallenius thanks the Yrjo Jahnsson Foundation for supporting the research. We also thank our colleagues with whom we discussed this research, as well as an anonymous referee for useful comments. We want to thank Simona Cociuba for providing exceptional research assistance. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. * Corresponding author at: Arizona State University, Department of Economics, PO 873806, Tempe, AZ, USA. E-mail address: [email protected] (E.C. Prescott). 1 Rosen (1978) also noted that this formulation was a tractable way to think about intensive and extensive margins of labor supply. See also the discussion in Barzel (1973).

PY - 2009/1

Y1 - 2009/1

N2 - This paper studies lifetime aggregate labor supply with endogenous workweek length. Such a theory is needed to evaluate various government policies. A key feature of our model is a nonlinear mapping from hours worked to labor services. This gives rise to an endogenous workweek that can differ across occupations. The theory determines what fraction of the lifetime an individual works, not when. We find that constraints on workweek length have different consequences for total hours than for total labor services. Also, we find that policies designed to increase the length of the working life may not increase aggregate lifetime labor supply.

AB - This paper studies lifetime aggregate labor supply with endogenous workweek length. Such a theory is needed to evaluate various government policies. A key feature of our model is a nonlinear mapping from hours worked to labor services. This gives rise to an endogenous workweek that can differ across occupations. The theory determines what fraction of the lifetime an individual works, not when. We find that constraints on workweek length have different consequences for total hours than for total labor services. Also, we find that policies designed to increase the length of the working life may not increase aggregate lifetime labor supply.

KW - Lifetime aggregate labor supply

KW - Workweek length

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DO - 10.1016/j.red.2008.07.005

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EP - 36

JO - Review of Economic Dynamics

JF - Review of Economic Dynamics

IS - 1

ER -

Lifetime aggregate labor supply with endogenous workweek length

Abstract

All Science Journal Classification (ASJC) codes

Keywords

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