https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

The future of employment: How susceptible are jobs to computerisation?

The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

Economics of Information

I develop a general equilibrium model with sticky prices, credit constraints, nominal loans and asset prices. Changes in asset prices modify agents’ borrowing capacity through collateral value; changes in nominal prices affect real repayments through debt deflation. Monetary policy shocks move asset and nominal prices in the same direction, and are amplified and propagated over time. The “financial accelerator” is not constant across shocks: nominal debt stabilises supply shocks, making the economy less volatile when the central bank controls the interest rate. I discuss the role of equity, debt indexation and household and firm leverage in the propagation mechanism. Finally, I find that monetary policy should not target asset prices as a means of reducing output and inflation volatility.

/pdf/house-prices-borrowing-constraints-and-monetary-policy-in-53saibtjbe.pdf

House Prices, Borrowing Constraints, and Monetary Policy in the Business Cycle

This paper undertakes an assessment of a rapidly growing body of economic research on financial literacy. We start with an overview of theoretical research which casts financial knowledge as a form of investment in human capital. Endogenizing financial knowledge has important implications for welfare as well as policies intended to enhance levels of financial knowledge in the larger population. Next, we draw on recent surveys to establish how much (or how little) people know and identify the least financially savvy population subgroups. This is followed by an examination of the impact of financial literacy on economic decision-making in the United States and elsewhere. While the literature is still young, conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps. A final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy.

/pdf/the-economic-importance-of-financial-literacy-theory-and-17mb1g4cfb.pdf

The Economic Importance of Financial Literacy: Theory and Evidence

A common approach to evaluating robustness to omitted variable bias is to observe coefficient movements after inclusion of controls. This is informative only if selection on observables is informative about selection on unobservables. Although this link is known in theory in existing literature, very few empirical articles approach this formally. I develop an extension of the theory that connects bias explicitly to coefficient stability. I show that it is necessary to take into account coefficient and R-squared movements. I develop a formal bounding argument. I show two validation exercises and discuss application to the economics literature. Supplementary materials for this article are available online.

/pdf/unobservable-selection-and-coefficient-stability-theory-and-1r9lpwnnl2.pdf

Unobservable Selection and Coefficient Stability: Theory and Evidence

The propensity to become a business owner is a nonlinear function of wealth. The relationship between wealth and entry into entrepreneurship is essentially flat over the majority of the wealth distribution. It is only at the top of the wealth distribution—after the ninety‐fifth percentile—that a positive relationship can be found. Segmenting businesses into industries with high– and low–starting capital requirements, we find no evidence that wealth matters more for businesses requiring higher initial capital. When using inheritances as an instrument for wealth, we find that both past and future inheritances predict current business entry, showing that inheritances capture more than simply liquidity. We further exploit the regional variation in house prices and find that households that lived in regions in which housing prices appreciated strongly were no more likely to start a business than households in other regions.

/pdf/liquidity-constraints-household-wealth-and-entrepreneurship-1t1ydnu0n4.pdf

Liquidity Constraints, Household Wealth, and Entrepreneurship

In this paper, we use five decades of time-use surveys to document trends in the allocation of time. We find that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked (per working-age adult) between 1965 and 2003. Specifically, we show that leisure for men increased by 6-8 hours per week (driven by a decline in market work hours) and for women by 4-8 hours per week (driven by a decline in home production work hours). This increase in leisure corresponds to roughly an additional 5 to 10 weeks of vacation per year, assuming a 40-hour work week. Alternatively, the "consumption equivalent" of the increase in leisure is valued at 8 to 9 percent of total 2003 U.S. consumption expenditures. We also find that leisure increased during the last 40 years for a number of sub-samples of the population, with less-educated adults experiencing the largest increases. 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.

/pdf/measuring-trends-in-leisure-the-allocation-of-time-over-five-32x7o72w34.pdf

Measuring Trends in Leisure: The Allocation of Time Over Five Decades

Parents invest both their material resources and their time into raising their children Time investment in children is thought to be critical to the development of "quality" children who will become productive adults This paper has three goals related to the examination of parental time allocated to the care of their children First, using data from the recent American Time Use Surveys (ATUS), we highlight what we think are the most interesting, and perhaps surprising, cross sectional patterns in time spent with children by parents within the United States Second, we interpret our results in a Beckerian framework of time allocation with a view toward establishing whether parental childcare appears to be more akin to leisure or home production Third, we examine data from a sample of 14 countries to establish whether the patterns we observe in the United States hold across countries and within other countries We show that both within countries and across countries there is a strong positive relationship between parental education, or earnings, and time spent with children We then show that time spent with children does not follow patterns typical of leisure or home production, suggesting an important difference We speculate that one reason for this positive education gradient relates to the investment aspect of time spent with children

https://papers.ssrn.com/sol3/Delivery.cfm/nber_w13993.pdf?abstractid=1133908&mirid=1&type=2

Parental Education and Parental Time with Children

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.

/pdf/measuring-trends-in-leisure-the-allocation-of-time-over-five-18xf7gd6rp.pdf

Parents invest both material resources and their time into raising their children. Time investment in children is important to the development of human capital. It is also one possible mechanism through which economic status is transmitted from generation to generation. This paper examines parental time allocated to the care of one's children. First, using data from the recent American Time Use Surveys, we highlight what we think are the most interesting cross-sectional patterns in time spent by American parents as they care for their children. (We will refer to the concepts of parental "child care" and parental "time spent with their children" interchangeably, though we discuss in the next section that the two measures might capture different things.) We find that higher-educated parents spend more time with their children; for example, mothers with a college education or greater spend roughly 4.5 hours more per week in child care than mothers with a high school degree or less. This relationship is striking, given that higher-educated parents also spend more time working outside the home. This robust relationship holds across all subgroups examined, including both nonworking and working mothers and working fathers. It also holds across all four subcategories of child care: basic, educational, recre ational, and travel related to child care. From an economic perspective, this positive education gradient in child care (and a similar positive gradient found for income)

/pdf/parental-education-and-parental-time-with-children-a1rf99z5ea.pdf

Erik Hurst

Papers

Liquidity Constraints, Household Wealth, and Entrepreneurship

Measuring Trends in Leisure: The Allocation of Time Over Five Decades

Parental Education and Parental Time with Children

Measuring Trends in Leisure: The Allocation of Time Over Five Decades

Parental Education and Parental Time with Children