2 ms·

> No need to make any policy changes; existing policy appears enough to make people work less I interpret this in the opposite way you do. Labor force partici

by mlyle 3y ago

> No need to make any policy changes; existing policy appears enough to make people work less I interpret this in the opposite way you do. Labor force participation includes effects where people think it's not economically worth their time to work. Reducing supply of labor could be expected to increase labor force participation. Not to mention this version of the statistic is a completely worthless one: it's not corrected for demographic (aging) effects. > As long as the ones who are working 10% fewer hours are also taking home 10% less This is unlikely: when you reduce the supply of something, the price tends to go up. > if everyone working works 10% less, that's 10% less available The marginal benefit of the factor (e.g. per-hour productivity) tends to go up, too. (Declining marginal factor product, blah blah blah). Indeed, this is why the price of the factor increases.

gottorf 3y ago
> effects where people think it's not economically worth their time to work This is only possible with generous social benefits given to those who aren't working. In the top 8 most generous states, transfer payments given to those not working exceed the median income[0]. > it's not corrected for demographic (aging) effects You're right. The prime working-age group (25-54) reversed the same downward trend after the 90-00 peak sometime in 2015, and recovered relatively quickly post-Covid[1]. But the picture isn't as rosy for young (20-24) entrants to the employment marketplace[2], which is worrisome. > The marginal benefit of the factor (e.g. per-hour productivity) tends to go up, too I understand, but aggregate production will go down, would it not? [0]: https://www.cato.org/sites/cato.org/files/pubs/pdf/the_work_versus_welfare_trade-off_2013_wp.pdf https://www.cato.org/sites/cato.org/files/pubs/pdf/the_work_... [1]: https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060 [2]: https://fred.stlouisfed.org/series/LNS11300036 https://fred.stlouisfed.org/series/LNS11300036
- mlyle 3y ago
  > This is only possible with generous social benefits given to those who aren't working. No; for example, as discussed, retirees are in the set. If supply of labor falls, a greater proportion of people able to be retired will work due to economic incentives. > I understand, but aggregate production will go down, would it not? Yes, but it contradicts your "10% less". Fighting the 10% less is: - For each worker, their least productive hours will be cut rather than their most productive - For some of hours lost, additional workers will be employed in higher value jobs. - Some types of output will not be affected at all; others it will be worth paying overtime. - For some of hours lost, automation will be employed. - Lowering commute use of roads and transport will increase productivity. All in all, I'd guess lowering the work week by 10%, and the nominal days-per-week to 4, might lower aggregate output by a couple percent. I would also expect wages to increase, arresting trends where wages have stagnated as productivity has increased.

by mlyle 3y ago

gottorf 3y ago

> effects where people think it's not economically worth their time to work This is only possible with generous social benefits given to those who aren't working. In the top 8 most generous states, transfer payments given to those not working exceed the median income[0]. > it's not corrected for demographic (aging) effects You're right. The prime working-age group (25-54) reversed the same downward trend after the 90-00 peak sometime in 2015, and recovered relatively quickly post-Covid[1]. But the picture isn't as rosy for young (20-24) entrants to the employment marketplace[2], which is worrisome. > The marginal benefit of the factor (e.g. per-hour productivity) tends to go up, too I understand, but aggregate production will go down, would it not? [0]: https://www.cato.org/sites/cato.org/files/pubs/pdf/the_work_versus_welfare_trade-off_2013_wp.pdf https://www.cato.org/sites/cato.org/files/pubs/pdf/the_work_... [1]: https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060 [2]: https://fred.stlouisfed.org/series/LNS11300036 https://fred.stlouisfed.org/series/LNS11300036

mlyle 3y ago
> This is only possible with generous social benefits given to those who aren't working. No; for example, as discussed, retirees are in the set. If supply of labor falls, a greater proportion of people able to be retired will work due to economic incentives. > I understand, but aggregate production will go down, would it not? Yes, but it contradicts your "10% less". Fighting the 10% less is: - For each worker, their least productive hours will be cut rather than their most productive - For some of hours lost, additional workers will be employed in higher value jobs. - Some types of output will not be affected at all; others it will be worth paying overtime. - For some of hours lost, automation will be employed. - Lowering commute use of roads and transport will increase productivity. All in all, I'd guess lowering the work week by 10%, and the nominal days-per-week to 4, might lower aggregate output by a couple percent. I would also expect wages to increase, arresting trends where wages have stagnated as productivity has increased.