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> 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 worki

> 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.

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.