Rising Inequality and Trends in Leisure
Abstract
The speaker and Prof Timo Boppart of Stockholm University develop a growth model that is consistent with both rising aggregate leisure and increasing leisure inequality observed in the US in recent decades. In their model household derive utility from three components: market produced good, home produced goods and leisure goods. Households allocate time and capital into each of the three production activity. The two driving forces for the dynamics are activity-specific TFP growth and a spread in the distribution of household-specific market efficiencies. The former accounts for the time series facts while the later induces rising comparative advantage for those with higher market efficiency in producing market goods, delivering the cross-section fact on rising leisure inequality. The aspect that leisure goods require time and capital as input allows both stylized facts to exist along the balance growth path of the model.
About the speaker
Prof. Rachel Ngai received her BSc in Economics from HKUST in 1996 and PhD in Economics from the University of Pennsylvania in 2001. She has been tenured at the London School of Economics and Political Science (LSE) since 2007, and is currently Reader in Economics. She is concurrently Research Associate at the Center for Economic Performance and Research Affiliate at the Center for Economic Policy Research at LSE.
Prof Ngai’s research interests include macroeconomics - growth and development, structural transformation, labor markets and housing markets. She is an associate editor of Economica.
