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Work Hours, Social Value of Leisure and Globalisation

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  • Wp 10-04

    Final published version, 401 KB, PDF document

  • Jørgen Drud Hansen
  • Jørgen Ulff-Møller Nielsen, Denmark
  • Catia Montagna, University of Dundee, United Kingdom
  • Hassan Molana, University of Dundee, United Kingdom
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
Place of publicationAarhus
PublisherAarhus School of Business, Aarhus University, Department of Economics
Number of pages32
ISBN (Print)9788778824332
ISBN (Electronic)9788778824349
Publication statusPublished - 2010

Bibliographical note

Also published as Dundee Discussion Papers in Economics No 229 by Depatment of Economic Studies, University of Dundee, Dundee

    Research areas

  • Coordination, Corporatism, Openness, Capital mobility, Social multiplier, Welfare, Work hours

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