Thursday, September 14, 2017

The long trend in labor hours

Branko Milanovic posted a chart on Twitter showing the average annual hours worked showing, among other things, that people worked twice as many hours during the industrial revolution:

From 1816 to 1851, the number of hours fell by about 0.14% per year:

100 (Log[3185] − Log[3343])/(1851-1816) = − 0.138

This graph made me check out the data on FRED for average working hours (per week, indexed to 2009 = 100). In fact, I checked it out with the dynamic equilibrium model:

Any guess what the dynamic equilibrium rate of decrease is? It's − 0.132% — almost the same rate as in the 1800s! There was a brief period of increased decline (a shock to weekly labor hours centered at 1973.4) that roughly coincides with women entering the workforce and the inflationary period of the 70s (that might be all part of the same effect).

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