Measures of Per Capita Hours and their Implications for the Technology-Hours Debate / Neville Francis, Valerie A. Ramey.

Format:

Book

Author/Creator:

Francis, Neville.

Contributor:

National Bureau of Economic Research.

Ramey, Valerie A.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11694.

NBER working paper series no. w11694

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2005.

Summary:

Structural vector autoregressions give conflicting results on the effects of technology shocks on hours. The results depend crucially on the assumed data generating process for hours per capita. We show that the standard measure of hours per capita has significant low frequency movements that are the source of the conflicting results. HP filtered hours per capita produce results consistent with the those obtained when hours are assumed to have a unit root. We provide an alternative measure of hours per capita that adjusts for low frequency movements in government employment, schooling, and the aging of the population. When the new measure is used to determine the effect of technology shocks on hours using long-run restrictions, both the levels and the difference specifications give the same answer: hours decline in the short-run in response to a positive technology shock.

Notes:

Print version record

October 2005.