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Why Hours Worked Decline Less after Technology Shocks?

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Forthcoming

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Why Hours Worked Decline Less after Technology Shocks? / Cardi, Olivier; Restout, Romain.
In: Journal of International Economics, 16.04.2025.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Cardi, O & Restout, R 2025, 'Why Hours Worked Decline Less after Technology Shocks?', Journal of International Economics. https://doi.org/10.1016/j.jinteco.2025.104095

APA

Cardi, O., & Restout, R. (in press). Why Hours Worked Decline Less after Technology Shocks? Journal of International Economics, Article 104095. https://doi.org/10.1016/j.jinteco.2025.104095

Vancouver

Cardi O, Restout R. Why Hours Worked Decline Less after Technology Shocks? Journal of International Economics. 2025 Apr 16;104095. doi: 10.1016/j.jinteco.2025.104095

Author

Cardi, Olivier ; Restout, Romain. / Why Hours Worked Decline Less after Technology Shocks?. In: Journal of International Economics. 2025.

Bibtex

@article{9ca7f77a6a6d4f99ac93b0bb2e7292b2,
title = "Why Hours Worked Decline Less after Technology Shocks?",
abstract = "The contractionary effect of technology shocks on hours gradually vanishes over time in OECD countries. To rationalize the decline in hours and its disappearance, we use a VAR-based decomposition of technology shocks into symmetric and asymmetric technology improvements. While hours decline dramatically when technology improves at the same rate across sectors, hours significantly increase when technology improvements occur at different rates. Because they are primarily driven by symmetric technology improvements, permanent technology shocks drive down total hours. Such a decline progressively vanishes due to the growing importance of asymmetric technology shocks. To reach these two conclusions, we simulate a two-sector model which can reproduce the contractionary effect on hours once the economy is internationally open and we allow for production factors{\textquoteright} mobility costs, factor-biased technological change, and home bias. To account for the vanishing decline in hours, we have to let the share of asymmetric technology shocks increase over time. ",
author = "Olivier Cardi and Romain Restout",
year = "2025",
month = apr,
day = "16",
doi = "10.1016/j.jinteco.2025.104095",
language = "English",
journal = "Journal of International Economics",
issn = "0022-1996",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Why Hours Worked Decline Less after Technology Shocks?

AU - Cardi, Olivier

AU - Restout, Romain

PY - 2025/4/16

Y1 - 2025/4/16

N2 - The contractionary effect of technology shocks on hours gradually vanishes over time in OECD countries. To rationalize the decline in hours and its disappearance, we use a VAR-based decomposition of technology shocks into symmetric and asymmetric technology improvements. While hours decline dramatically when technology improves at the same rate across sectors, hours significantly increase when technology improvements occur at different rates. Because they are primarily driven by symmetric technology improvements, permanent technology shocks drive down total hours. Such a decline progressively vanishes due to the growing importance of asymmetric technology shocks. To reach these two conclusions, we simulate a two-sector model which can reproduce the contractionary effect on hours once the economy is internationally open and we allow for production factors’ mobility costs, factor-biased technological change, and home bias. To account for the vanishing decline in hours, we have to let the share of asymmetric technology shocks increase over time.

AB - The contractionary effect of technology shocks on hours gradually vanishes over time in OECD countries. To rationalize the decline in hours and its disappearance, we use a VAR-based decomposition of technology shocks into symmetric and asymmetric technology improvements. While hours decline dramatically when technology improves at the same rate across sectors, hours significantly increase when technology improvements occur at different rates. Because they are primarily driven by symmetric technology improvements, permanent technology shocks drive down total hours. Such a decline progressively vanishes due to the growing importance of asymmetric technology shocks. To reach these two conclusions, we simulate a two-sector model which can reproduce the contractionary effect on hours once the economy is internationally open and we allow for production factors’ mobility costs, factor-biased technological change, and home bias. To account for the vanishing decline in hours, we have to let the share of asymmetric technology shocks increase over time.

U2 - 10.1016/j.jinteco.2025.104095

DO - 10.1016/j.jinteco.2025.104095

M3 - Journal article

JO - Journal of International Economics

JF - Journal of International Economics

SN - 0022-1996

M1 - 104095

ER -