Work, leisure, and productivity

Last Sunday, the Boston Globe's Christopher Shea wrote a counterintuitive article about how well Europe compares with the United States: In the face of rampant Europessimism, some contrarian scholars insist that European countries can thrive without embracing American-style labor markets (where most people can be fired at will) and relatively lean social programs. Two years ago, the MIT economist Olivier Blanchard made news with an article claiming that Europe was gaining on the United States. True, gross domestic product per person was only 70 percent of America's, a gap that has existed for a generation. But by the measure of output per hour of work, Europe had reached 90 percent of American levels. Europeans were simply choosing to work fewer hours, Blanchard suggested-not an obviously dumb move. They were trading income for more leisure. Sounds plausible.... until you get to this week's Economist. At which point you discover something very interesting... leisure time in the United States is on the increase: A pair of economists have looked closely at how Americans actually spend their time. Mark Aguiar (at the Federal Reserve Bank of Boston) and Erik Hurst (at the University of Chicago's Graduate School of Business) constructed four different measures of leisure. The narrowest includes only activities that nearly everyone considers relaxing or fun; the broadest counts anything that is not related to a paying job, housework or errands as ?leisure?. No matter how the two economists slice the data, Americans seem to have much more free time than before. Over the past four decades, depending on which of their measures one uses, the amount of time that working-age Americans are devoting to leisure activities has risen by 4-8 hours a week. (For somebody working 40 hours a week, that is equivalent to 5-10 weeks of extra holiday a year.) Nearly every category of American has more spare time: single or married, with or without children, both men and women. The only twist is that less educated (and thus poorer) Americans have done relatively better than more educated ones (see chart). And that is not just because unemployed high-school drop-outs have more free time on their hands. Less educated Americans with jobs?the overstretched middle class of political lore?do very well.... Messrs Aguiar and Hurst think that the hours spent at your employer's are too narrow a definition of work. Americans also spend lots of time shopping, cooking, running errands and keeping house. These chores are among the main reasons why people say they are so overstretched (especially working women with children). However, Messrs Aguiar and Hurst show that Americans actually spend much less time doing them than they did 40 years ago. There has been a revolution in the household economy. Appliances, home delivery, the internet, 24-hour shopping, and more varied and affordable domestic services have increased flexibility and freed up people's time. So women are devoting more hours to paying jobs, but have cut their housework and other burdensome tasks by twice as much. Men have picked up some of the slack at home; but thanks to technology and other advances, there is plenty of free time left over for them as well, since they have yielded some of their paid working hours to women. This trend ties into the biggest productivity advantage the United States has over the rest of the advanced industriaized world -- the retail and wholesale sectors. Increases on productivity in those arenas don't only benefit producers -- they lead to significant benefits for consumers, in the form of fewer time and resources devoted to essential household tasks, like shopping for groceries. In the paper cited by the Economist, Aguiar and Hurst observe that: The present study focuses exclusively on the United States.... to our knowledge, there are no studies using European data that perform a time-series analysis similar to the one below. This remains an important area for future research. That would be some interesting research. It is possible that heightened U.S. efficiency in the retail and wholesale sectors -- and maybe, come to think of it, the housing sector as well, though economists tend to think about housing productivity in terms of construction as opposed to usage -- means that Americans work more and play more than Europeans.