Creator: Prescott, Edward C., Rogerson, Richard Donald, and Wallenius, Johanna Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 400 Abstract:
This paper studies lifetime aggregate labor supply with endogenous workweek length. Such a theory is needed to evaluate various government policies. A key feature of our model is a nonlinear mapping from hours worked to labor services. This gives rise to an endogenous workweek that can differ across occupations. The theory determines what fraction of the lifetime an individual works, not when. We find that constraints on workweek length have different consequences for total hours than total labor services. Also, we find that policies designed to increase the length of the working life may not increase aggregate lifetime labor supply.
Keyword: Workweek length and Lifetime aggregate labor supply Subject (JEL): E20 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data) and J20 - Demand and Supply of Labor: General