TY  - JOUR
AU  - Francis,Neville
AU  - Ramey,Valerie A.
TI  - Measures of Per Capita Hours and their Implications for the Technology-Hours Debate
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11694
PY  - 2005
Y2  - October 2005
UR  - http://www.nber.org/papers/w11694
L1  - http://www.nber.org/papers/w11694.pdf
N1  - Author contact info:
Neville Francis
Department of Economics
University of North Carolina
Gardner Hall, CB#3305
Chapel Hill, NC 27599
Tel: 919-966-5327
E-Mail: nfrancis@unc.edu

Valerie A. Ramey
Department of Economics, 0508
University of California, San Diego
9500 Gilman Drive
La Jolla, CA 92093-0508
Tel: 858/534-2388
Fax: 858/534-7040
E-Mail: VRAMEY@UCSD.EDU
AB  - Structural vector autoregressions give conflicting results on the effects of technology shocks on hours. The results depend crucially on the assumed data generating process for hours per capita. We show that the standard measure of hours per capita has significant low frequency movements that are the source of the conflicting results. HP filtered hours per capita produce results consistent with the those obtained when hours are assumed to have a unit root. We provide an alternative measure of hours per capita that adjusts for low frequency movements in government employment, schooling, and the aging of the population. When the new measure is used to determine the effect of technology shocks on hours using long-run restrictions, both the levels and the difference specifications give the same answer: hours decline in the short-run in response to a positive technology shock.
ER  -