Are we working less? An examination of Changing UK Labour supply decisions since the 1990s

The desire to substitute leisure for work as we grow richer is anticipated in the work of Becker and was famously predicted by Keynes. With reference to the UK from 1994q2 to 2015q2, this study examines labour supply decisions with respect to earnings and considers whether we are willing or indeed able to work less. We specifically focus on the three points of time i.e. beginning of the sample, pre and post Global Financial Crisis. The results suggest that we are far from income-satiated. The elasticity of hours worked with respect to earnings is stubbornly inelastic and for some demographic cohorts positive, implying the desire to work more. We find that job flexibility matters in facilitating reduced hours of work, but that jobs are not becoming more flexible. We do see a secular reduction in hours worked, accompanied by a shift to working later in life, but these appear to be down to factors other than higher wages.