Title: Fixed Worker Costs and the Distribution of Leisure


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.