Distracting activities in times of COVID-19 pandemic and their relation to labor supply

Abstract

Under the hypothesis that workers become distracted and spend less time working during the COVID-19 pandemic, we analyze, via a model of endogenous growth, the relationship between distracting activities and home office supply. We find a strong theoretical relation between the intertemporal elasticity of substitution of the time spent on distracting activities and the intertemporal elasticity of substitution of home office labor. We also analyze the effect that the intertemporal elasticity of substitution of home office labor has on the marginal productivity of effective labor and the growth rate of production.