{"title":"The Leisure Gains from International Trade","authors":"Agustin Velasquez","doi":"10.1016/j.jinteco.2025.104061","DOIUrl":null,"url":null,"abstract":"<div><div>The average number of hours worked has been declining in many countries. If workers have preferences such that income effects outweigh substitution effects, then a welfare-improving response to rising income is to reduce labor supply to enjoy more leisure time. Using a multi-country Ricardian trade model, I derive an hours-to-trade elasticity that is composed by the wage (Marshallian) and trade elasticities. I estimate the hours-to-trade elasticity by exploiting exogenous income variation generated by trade. Findings suggest that a one percent increase in imports (as share of GDP) leads to a 0.17 percent decline in hours per worker. This implies dominating income effects backed by a wage elasticity of -0.16 and a trade elasticity close to unity. I quantify that the rise in trade openness between 1950 and 2014 explains, on average, 7.4 percent of the total decline in hours per worker in high-income countries.</div></div>","PeriodicalId":16276,"journal":{"name":"Journal of International Economics","volume":"155 ","pages":"Article 104061"},"PeriodicalIF":3.8000,"publicationDate":"2025-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of International Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0022199625000170","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
The average number of hours worked has been declining in many countries. If workers have preferences such that income effects outweigh substitution effects, then a welfare-improving response to rising income is to reduce labor supply to enjoy more leisure time. Using a multi-country Ricardian trade model, I derive an hours-to-trade elasticity that is composed by the wage (Marshallian) and trade elasticities. I estimate the hours-to-trade elasticity by exploiting exogenous income variation generated by trade. Findings suggest that a one percent increase in imports (as share of GDP) leads to a 0.17 percent decline in hours per worker. This implies dominating income effects backed by a wage elasticity of -0.16 and a trade elasticity close to unity. I quantify that the rise in trade openness between 1950 and 2014 explains, on average, 7.4 percent of the total decline in hours per worker in high-income countries.
期刊介绍:
The Journal of International Economics is intended to serve as the primary outlet for theoretical and empirical research in all areas of international economics. These include, but are not limited to the following: trade patterns, commercial policy; international institutions; exchange rates; open economy macroeconomics; international finance; international factor mobility. The Journal especially encourages the submission of articles which are empirical in nature, or deal with issues of open economy macroeconomics and international finance. Theoretical work submitted to the Journal should be original in its motivation or modelling structure. Empirical analysis should be based on a theoretical framework, and should be capable of replication.