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IS PRODUCTIVITY ON VACATION? THE IMPACT OF THE DIGITAL ECONOMY ON THE VALUE OF LEISURE

Published online by Cambridge University Press:  13 April 2020

Benjamin Bridgman
Benjamin Bridgman*
Affiliation:
Bureau of Economic Analysis
*
Address correspondence to: Benjamin Bridgman, US Department of Commerce, Bureau of Economic Analysis, Washington, DC20230, USA. e-mail: [email protected]. Phone: (301) 278-9012. Fax: (301) 278-9488.
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Abstract

Many recent digital innovations (like video games) augment the value of leisure time, which is not captured by Gross Domestic Product. Therefore, the productivity impact of such innovations may be understated. I develop the theoretical foundations for measuring the value of leisure when it is produced using the household’s leisure time and recreational durable goods. I apply this framework to estimate the value of US leisure from 1948 to 2016. While the value of leisure is large, it has become less important over time. I find that productivity growth of leisure time has slowed in the digital era. Household stocks of digital goods are small, so have relatively little impact on leisure value. I conclude that mismeasurement due to household digital goods is not a first-order cause of the recent productivity slowdown.

Keywords

LeisureConsumer DurablesTotal IncomeHousehold ProductionProductivity
Type
Articles
Information
Macroeconomic Dynamics , Volume 26 , Issue 1 , January 2022 , pp. 127 - 148
Copyright
© Cambridge University Press 2020

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Footnotes

I thank seminar participants at the Midwest Macro Meetings (Kansas City), Federal Reserve Bank of Dallas, and the Productivity Growth Past, Present, and Future Conference at Arizona State for comments. The views expressed in this paper are solely those of the author and not necessarily those of the US Bureau of Economic Analysis or the US Department of Commerce.

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