In class this week we have looked at the Ricardian Model. Part of this model looks at how the productivity of two countries compare with certain products. At the end of the last class we looked at the graph that compared countries productivity to the US. This graph showed us how the different labor forced compared. In the article Which Country Has the Most Productive Workers, I found that the US are third in productivity out of all the different countries labor forces. However the US workers are second to Korea for the longest hours worked. France were ahead of the US with their GDP to hours worked, and this is surprising because of the vacation time the French workers take. The article talks about how more vacation times lead to a happier workforce and how that improves the Frances productivity, also the diminishing returns for the US of working 40 hour weeks. However looking at the Ricardian model we found that not only do the French take more vacation time, but they will get higher wages due to the fact their productivity is higher, which is seen as a producer problem for the Ricardian Model, because he believed that wages needed to be the same in all sectors otherwise nobody would work in the lower paying sector. however in real life not everyone can more to France and Germany for the higher wages.
Also because of the difference in productivity, it could be said the the French have an absolute advantage to most products compared to the US. However what we discussed in class is that the US will have certain products where they have the comparative advantage over France and this is why we have trade between these two countries. If we didn't look at the comparative advantage, we would assume the the French just wouldn't trade with the US.
Sam, I also read the article that you posted and found a very intriguing statement that's worth mentioning. I liked the fact that the Danes worked the fewest amount of hours a week and are still being productive as an economy. It also mentioned that they are rated the "happiest" workforce as well. Does the Riciadian model take into account the well-being of the workers? If not, is there a model that does? We know that comparative advantage takes into account the gains from trade for an individual, but is strictly a "numbers" theory. I would find it interesting to see some models that do take into account happiness or health for an example.
ReplyDeleteSam, the article was an interesting read. I thought the most valid/interesting point in the article was about diminishing returns especially for US workers. There is an article in the economist that talks about this in greater depth and has an excellent graph that shows the diminishing returns. (http://www.economist.com/blogs/freeexchange/2014/12/working-hours)
ReplyDeleteThe article tells us there is plenty of empirical evidence to confirm that reducing the workweek would make the workforce more productive (there's a link in the article to a recent paper by John Pencavel of Stanford University). Given this evidence, why do you think the US persists with it's 40 hour + work week?
I really liked this article. Shorter work weeks is something that has gained attention politically within the last few years. I believe that a shorter work week would be especially beneficial for graduating college students as they move into the labor force. A shorter work week could help smooth the transition from the freedom of college to the long days of working a full-time job. It will be interesting to see what companies and policy makers do in the coming years to try and combat the law of diminishing returns with respect to labor productivity.
ReplyDeleteI really liked this article. Shorter work weeks is something that has gained attention politically within the last few years. I believe that a shorter work week would be especially beneficial for graduating college students as they move into the labor force. A shorter work week could help smooth the transition from the freedom of college to the long days of working a full-time job. It will be interesting to see what companies and policy makers do in the coming years to try and combat the law of diminishing returns with respect to labor productivity.
ReplyDeleteLike everyone else, I thought this was an interesting article. it would be interesting, and nice, to have a shorter work week. However, I feel like more people would be forced to work overtime if they have a lot of work or if they are if they keep getting bombarded with work. This also would depend on the person's job and maybe even their position in the company.
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