When should we work? A theoretical approach

Abstract

This paper analyzes exibility in working hours from a theoretical point of view. The aim of this analysis is not only how much work is performed, but also when it is performed. In this context exibility is understood as the capacity to match the preferences of workers well to the rm s needs. We draw up a model for determining the schedules in an economy with heterogeneous agents. Types are distinguished by their preferences for leisure time or production time. First we de ne the economy without exibility. Then we analyze, under exibility, what the optimal working schedule would be for each worker type. This is conditioned by the capital used in the plant. The baseline model solves the assignment of di¤erent types of workers to di¤erent production plants in a competitive equilibrium. The model enables us to determine what capital stock the plants must have and during what period they should be used in order that they adjust to the preferences. The exible results, that conform to the preferences of rms and workers, it is optimal, e¢ cient and reaches the maximum instantaneous aggregate production of the economy. As an extension of the model we analyze the possibility of working at home. In this case the capital stock does not condition the work schedule. Thus, not only the time of work, but also the workplace turn into endogenous variables.