Saving Behaviour and the Intergenerational Allocation of Leisure Time

TitleSaving Behaviour and the Intergenerational Allocation of Leisure Time
Publication TypeWorking Paper
Year of Publication2023
AuthorsCerina, F, Raurich, X
Number23_15
ISBN Number978 88 68514 914
Keywordsintergenerational preferences for leisure, Labor Supply, overlapping generations, saving behaviour, time allocation
Abstract

We study how preferences for leisure and its life-cycle allocation affect the macroeconomic equilibrium. To do so we extend an OLG model with leisure by allowing for the individual to allocate her leisure time within and across generations. Due to complementarity between consumption and leisure activities, we show that economies where the value placed on leisure by younger relative to older generations is lower, exhibit higher saving rates, higher stock of capital per worker higher fraction of time worked in the steady-state. Using data from the World Value Survey, we provide empirical support for these predictions. Lastly, we explore the implications of this channel on the optimality of the market equilibrium and on capital overaccumulation.

Citation Key7398
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