Trends in Hours : The U . S . from 1900 to 1950 ∗

During the first half of the 20th century the length of the workweek in the United States declined, and its distribution across wage deciles narrowed. The hypothesis is twofold. First, technological progress, through the rise in wages and the decreasing cost of recreation, made it possible for the average U.S. worker to afford more time off from work. Second, changes in the wage distribution explain the changes in the distribution of hours. A general equilibrium model is built to explore whether such mechanisms can quantitatively account for the observations. The model is calibrated to the U.S. economy in 1900. It predicts 82% of the observed decline in hours, and most of the contraction in their dispersion. The decline in the price of leisure goods accounts for seven percent of the total decline in hours. ∗This paper was originally circulated under the title “Long-Run Trends in Hours: A Model.” Thanks to Karen Kopecky for many fruitful discussions and for sharing her database on the price of leisure goods. Thanks also to seminar participants at the 2005 Midwest Macro Meetings, the 2005 NBER Summer Institute, the SITE conference at Stanford, Simon Fraser, Purdue, Loyola Marymount, Santa Barbara, UCLA, Duke Fuqua school of business, Claremont-McKenna, the SED, IZA and Arizona State University. I am also thankful to two anonymous referees who provided very valuable help and comments. Any remaining errors or inconsistencies are mine. ∗∗University of Iowa, Department of Economics, W370 PBB, Iowa City, IA 52242-1994. Email: guillaume-vandenbroucke at uiowa dot edu.