Changes in Job Quality and Trends in Labor Hours

40 Pages Posted: 26 Feb 2007

See all articles by Brahima Coulibaly

Brahima Coulibaly

Board of Governors of the Federal Reserve System

Date Written: October 2006

Abstract

Many economic models featuring labor supply decision, especially in macroeconomic analysis, assume away heterogeneity in the nature of work, or assume that the nature of work is irrelevant to the labor/leisure choice. This paper studies the macroeconomic implications of relaxing this assumption. Estimation from micro data using labor hours, wages, consumption, and nonpecuniary job characteristics suggests that labor supply responds to differences and to changes in the nature of work. Ceteris paribus, some job characteristics induce more labor hours than others do. Labeling the jobs that embed the labor-inducing characteristics as better quality jobs, the study estimates a Job Quality index for the aggregate U.S. economy from 1850 to 2000. The results suggest that over the same period, improvements in Job Quality accounted for at least 20.4 percent of growth in labor hours.

Keywords: Job Quality, Labor Supply, Trends in Labor Hours

JEL Classification: E24, J22, O47

Suggested Citation

Coulibaly, Brahima, Changes in Job Quality and Trends in Labor Hours (October 2006). FRB International Finance Discussion Paper No. 882, Available at SSRN: https://ssrn.com/abstract=964957 or http://dx.doi.org/10.2139/ssrn.964957

Brahima Coulibaly (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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