The dynamics of hours worked and technology

The response of hours worked to technology shocks in the postwar US economy has increased over time. We offer a structural interpretation of this important time-varying macroeconomic moment. The time varying patterns captured by a structural VAR are consistent with those obtained from a parsimonious...

Full description

Saved in:
Bibliographic Details
Published inJournal of economic dynamics & control Vol. 82; pp. 67 - 82
Main Authors Cantore, Cristiano, Ferroni, Filippo, León-Ledesma, Miguel A.
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.09.2017
Subjects
Constant elasticity of substitution production function
Hours worked
Real business cycles models
Technology shocks
C53
Constant elasticity of substitution production function
Real business cycles models
E32
Technology shocks
E37
Hours worked
Online AccessGet full text

Cover

More Information
Summary:The response of hours worked to technology shocks in the postwar US economy has increased over time. We offer a structural interpretation of this important time-varying macroeconomic moment. The time varying patterns captured by a structural VAR are consistent with those obtained from a parsimonious RBC model with a less than unitary elasticity of substitution between capital and labour (σ). The observed changes in the response of hours are attributable to increases in the magnitude of the degree of capital-labour substitution. Finally, we conjecture that the observed time-variation in σ is related to changes in the skill composition of the work force and biases in technological change.
ISSN:0165-1889
1879-1743
DOI:10.1016/j.jedc.2017.05.009