Engines of Leisure

U.S. time use patterns have changed over the last century in ways that appear inconsistent. Leisure has increased with income but has increased most for the poorest. I develop a unified model that treats leisure as an economic activity. Leisure services are produced using capital, like televisions, and non-market time. Doing so improves the labor supply predictions of macro models. The model's U.S. labor wedge more closely matches observable labor market distortions. It is also is consistent with the observed reversal in 20th Century leisure inequality, where high income workers went from working less to more than low income workers. Leisure capital reinforces inequality; poorer households have more leisure hours but less capital.