Collaborative Research: Human Capital Accumulation and Aggregate Labor Supply

In the last fifty years there has been a dramatic change in the level and composition of worker hours allocated to market production. The largest change is the increase in market hours of married females. This has been accompanied by relative stability in the number of hours worked by single male and females, and by married males. In addition to the change in hours, there is a distinctive pattern of decreased fertility, especially among highly educated women, and increase in the proportion of births after age thirty. To understand the events that may have caused these substantial changes, this research constructs dynamic general equilibrium models of the macroeconomy in which households choose labor supplies, consumption and investment in both human and physical capital. Both market and non-market consumption enter utility and require both quality-adjusted time and physical capital to be produced. In our models, a household can either be a married couple or single individuals living alone. All the economic agents, single, married, male, or female; interact in aggregate markets for labor, capital, investment and market consumption. A major objective of the research is to determine what factors could explain observed gender-based wage differentials. The research will consider the impact of several types of technological change including, increased productivity of household durables, changes in the marriage market, and shocks to the costs of acquiring human capital.