Title: Fixed Worker Costs and the Distribution of Leisure
Abstract:
In an earlier paper, we showed that a change in technology can lead to an increase in leisure. In this paper, we explain how an increase in leisure can be unevenly distributed, with some workers having very little increase and other workers experiencing involuntary unemployment. The idea is that there are high fixed costs to keeping a worker, so that it is not economical to maintain a large work force that works fewer hours. In the short run, workers who are displaced by technology are unable to overcome the barrier posed by high fixed costs, and they become unemployed. In the long run, adaptations in the work force (including the entry of newer-vintage workers and the exit of older-vintage workers) reduce the inequality in the distribution of leisure and in particular the rate of involuntary unemployment.
READER COMMENTS
Frost
Jan 11 2011 at 12:19pm
That might be an interesting idea, but I’m going to need 5+ pages of abstract mathematical modeling before I can truly understand what you’re getting at.
Ho ho ho
Posts like these make it painfully obvious that 95% of the value of theory papers is in the abstract. Maybe professional economists stopped caring about the journals, and started publishing their ideas online in abstract-length snippets, so other economists could read and comment on them? I call my idea “Blawgs.”
Matt C
Jan 11 2011 at 12:34pm
To throw in some anecdotes, I freelance and I only work part time for any one client. My brother just got cut back to 32 hour weeks at his job (I think he’s still considered full time), and his wife recently decided to switch to a 32 hour position (she’s considered part time).
Everyone is predicting an increase in part time and contract employment. I see something like it happening, though I wonder if this will last if we have a robust recovery.
If it does last, I’m curious what the next move by our benevolent leaders is going to be. It might take a while for them to decide to start meddling, though. I hope.
Tyler Cowen
Jan 11 2011 at 3:00pm
Richard Rogerson!
Alex Tabarrok
Jan 11 2011 at 3:14pm
I think Gary Hansen will write that paper:
http://www.sciencedirect.com/science/article/B6VBW-4CB77DR-3F/2/2dfd1ad92f5f892da1495ff197ae0363
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