Who Has More Leisure Time: High or Low Income Earners?

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Who Has More Leisure Time: High or Low Income Earners?

One of the never-ending and controversial inequality issues is work effort.

It’s an age-old dilemma on who works harder. Are top earners perceived as more successful because of their hard work (see people with right leanings aka Romney) or is it middle class and the poor also equally working  hard–if not harder because they hold multiple jobs to ideally make ends meet (see people with left leanings aka Obama)?

The economic odds are not in the latter’s favor but leisure time may be. Is there a trade-off?

In the paper by Orazio Attanasio, Erik Hurst and Luigi Pistaferri called, “The Evolution of Income, Consumption, and Leisure Inequality in The US, 1980-2010,” evidence  showed that the higher-educated (and yes higher-earning) Americans spend more time working but less time on leisure activities than the poorer income groups, according to The Wall Street Journal.

In addition, while income inequality may be on the rise, “leisure inequality” which can be defined as the time spent on enjoyment, is increasing with low earners grabbing more leisure while high earners are losing it.

The paper also discovered that income inequality and consumption inequality (items bought by people) has risen in the last 20 years.

But here’s a more interesting finding.  The leisure gap has expanded between the highly-educated and less-educated.  Low-educated men watched their leisure hours rise to 39.1 hours in 2003-2007, up from 1985’s 36.6 hours. On the other hand, the highly-educated men saw their leisure hours decline to 33.2 hours from 34.4 hours.

Hurst noted that education levels are a “proxy” for incomes because they usually correspond, per the Wall Street Journal.

Women had a similar pattern. The low-educated women had greater leisure time from 35.2 hours per week, up from 35 hours. High-educated women reported a leisure time drop to 30.3 hours from 32.2 hours.

And for educated women? They suffered from the greatest decline in leisure time across the four groups.

(Note: Leisure is defined by the study as time spent watching TV, socializing, playing games, talking on the phone, reading personal email, enjoying entertainment and hobbies and other activities.)

Some decline may be attributed to non-educated people either being unemployed or under-employed and their leisure time is really defined as “not being able to work” time.

Unemployment was factored into the research and it showed that half the gap can be attributed to it. Hurst said in the study that the leisure gap is still there between employed high-educated workers and employed low-educated workers. It also persists among both unemployed high-education people and low-education people.

In the end, the study did set out to prove high earners work harder but as Hurst noted “that story would be consistent with the data.”

What do you think, do higher earners work harder?

Do the Wealthy Work Harder

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The post above is drafted by the collaboration of the Hedge Fund Alpha Team.

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