More Leisure Time: A Solution to Inequality? (Probably Not)

The Federal Reserve Bank has a biweekly e-mail chock full of news, the latest economic research, and sundry predictions on the future of the economy (weighted towards the neoclassical - the free market is best - point of view). A recently highlighted study on leisure time by two University of Chicago economists Aguiar and Hurst takes a unique approach to income inequality, raising some sticky questions:

• Can having more leisure time - like days of vacation - make up for lower wages? If it's true that high-income earners have less leisure time than low-income earners, does that mean that low-income people are 'better off,' in a way? Does it make up for the inequality in incomes?
  
• How does a worker value not-working, aka 'leisure time'? Does a low-income person value leisure time more or less? Does a high-income earner value it more or less?
  

Here's the abstract for their paper:

In this paper, we use five decades of time-use surveys to document trends in the allocation of time within the United States. We find that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked between 1965 and 2003. Specifically, using a variety of definitions for leisure, we show that leisure for men increased by roughly six to nine hours per week (driven by a decline in market work hours) and for women by roughly four to eight hours per week (driven by a decline in home production work hours). Lastly, we document a growing inequality in leisure that is the mirror image of the growing inequality of wages and expenditures, making welfare calculation based solely on the latter series incomplete.

In summary, men and women have gotten more leisure time over the past 25 years, and low-income people tend to have more leisure time than higher-income people. Sounds like good news - Americans are one step closer to the dream of a 40 hour work week, more time to spend with the kids or work on the car, etc. In fact, vacation time, paid sick days and the like are very important and often over-looked indicators of a decent job. I can't argue with premise of this paper - that more time off can help a person lead a happier life.

But - does more leisure time matter for the 47 million Americans who do not have health care coverage? How many of those workers who have more leisure time actually chose to work less, as opposed to not being able to find a full-time job or a job with health care benefits? A 'leisuring' person could be spending quality time with their children, or in the doldrums of depression because they can't make ends meet or take their sick eight-year old kid to see a doctor.

Anecdotally I feel like I'm on solid ground - google "Wal-Mart employee denied full-time" and start scrolling through the 199,000 results.

By the numbers, there's also plenty of evidence that questions whether leisure time is a desired outcome: In April, prior to the blow-up of the housing market, the number of under-employed workers - at 4.4 million or 8.2%- was the highest it has been since September 2005.

And wait - Men and women workers of America have more spare time? I'm not so sure. The average annual family hours worked actually went up 11% from 1975 to 2004. In other words, it's likely that not just one parent in the family - it's both. This is a huge shift, which has implications for family life. If you look at the metric of the average of weekly hours worked, it has remained pretty stable - but that's an artifact of women's lower work hours relatively to men dragging down the average.

I'd feel better about an increase in leisure time if I knew we had a strong national economy that created decent-paying jobs with health care benefits. As it stands, the economic growth of the 2000s has accrued to the most wealthy, and decent-paying jobs are in scarce supply. That trumps leisure time.