LAUSR

The United States' postwar period has seen an increase in aggregate market hours worked, a decline in home production hours, and an increase in the consumption to output ratio. A multisector growth model that allows for an increase in total factor productivity in the market sector relative to the home sector can account for these phenomena. Households shift hours to the more productive market sector and purchase measured market goods in favor of unmeasured home goods. This channel accounts for a quarter of the increase in the consumption to output ratio observed in the data from 1950 to 2007.