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Work hours, social value of leisure and globalisation

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  • Jørgen Drud Hansen, Syddansk Universitet, Denmark
  • Hassan Molana, University of Dundee, United Kingdom
  • Catia Montagna, University of Dundee, United Kingdom
  • Jørgen Ulff-Møller Nielsen, Denmark
We examine how openness interacts with the coordination of consumption-leisure decisions in determining the equilibrium working hours and wage rate when there are leisure externalities (e.g., due to social interactions). The latter are modelled by allowing a worker’s marginal utility of leisure to be increasing in the leisure time taken by other workers. Coordination takes the form of internalising the leisure externality and other relevant constraints (e.g., labour demand). The extent of openness is measured by the degree of capital mobility. We find that: coordination lowers equilibrium work hours and raises the wage rate; there is a U-shaped (inverse-U-shaped) relationship between work hours (wages) and the degree of coordination; coordination is welfare improving; and, the gap between the coordinated and uncoordinated work hours (and the corresponding wage rates) is affected by the extent and nature of openness.
Original languageEnglish
JournalJournal of Behavioral and Experimental Economics
Volume41
Issue3
Pages (from-to)317-326
ISSN2214-8043
DOIs
Publication statusPublished - 2012

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