Monday, 12 September 2011

Work and Leisure

If you watch the Jane Austen TV series you may have wondered how much time her characters spend organizing their leisure activities. She wrote in an epoch when leisure was the only respectable occupation for the rich. In contrast, the poor had very little leisure. This sharp distinction between leisure and work had not been so marked before the industrial revolution and has been weakening again since then.

So, it is not surprising that in those days Engels and other writers suggested that leisure was a reaction or compensation for work. The concept was taken a step further by some economists who took leisure as the opposite of labor. The first was seen as contributing to utility while the second reduced utility. Therefore, for some the value of work could be measured by its opportunity cost in terms of leisure.

This simplistic view was then corrected by Jevons who defined labor as "any painful exertion of mind or body undergone partly or wholly with a view to future good." and shifted attention from work or leisure as such to the marginal units of utility derived from each activity. This view that a person stops working only when the marginal disutility of work exceeds the marginal utility of the consumption derived from additional work, still underlies today’s economic thinking.

However, as was suspected then and has been confirmed in our time, there is no clear cut relation between work and leisure. Psychologists have been measuring whether people take leisure as a spillover, as compensation or as simply neutral in relation to work. In general, they found some causality between work and leisure. But, it was too weak and too complex to warrant the economists’ assumptions.

This problem, together with the need to distinguish free time from leisure, voluntary from involuntary leisure, the reinterpretation of work as a playful activity, the results of human capital investment and exertion, etc. raise important challenges for economists. In particular, unless they have a coherent interpretation of all these issues it is unlikely that they can develop a sound theory to explain the relation between work in general and the motivation for paid work (wages). The later involves both the satisfaction provided by the fruits of work as well as that of sharing such results.

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