The Macroeconomics of Work Time
- 1 December 1998
- journal article
- research article
- Published by Taylor & Francis in Review of Social Economy
- Vol. 56 (4) , 425-441
- https://doi.org/10.1080/00346769800000043
Abstract
In this paper we demonstrate that because of stagnating wages and rising job insecurity, there has been a change in the labor supply regime in the U.S. macroeconomy since the 1970s. There is now greater labor supply at any given officially measured unemployment rate. This induced growth in the quantity of labor effort is coming from experienced, incumbent workers and therefore does not show up in the official unemployment rate. While this may diminish family and community life, the increased aggregate labor supply means rising aggregate demand is being absorbed even at unemployment rates of less than 5 percent without sparking inflationary pressures. Because of this upward structural trend in weekly hours, monetary policy authorities must now recognize that standard jobless measures have become a misleading gauge of available labor.Keywords
This publication has 1 reference indexed in Scilit:
- Assessing the Time‐Squeeze Hypothesis: Hours Worked in the United States, 1969–89Industrial Relations: A Journal of Economy and Society, 1994