Trends in hours and economic growth
AuthorNgai, Liwa Rachel
Pissarides, Christopher A.
SourceReview of Economic Dynamics
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We study the substitutions between home and market production over long periods of time. We use the results to get predictions about long-run trends in aggregate market hours of work and about employment shifts across economic sectors, driven by uneven TFP growth in market and home production. The model can rationalize the observed falling or U-shaped pattern for aggregate market hours, the complete marketization of home production in agriculture and manufacturing, and the shift from agriculture and manufacturing to services. We find support for the model's predictions in long-run US data. © 2007 Elsevier Inc. All rights reserved.