How Improved Video Game Technology Caused Work Decline In Younger Men

A significant increase in pay, which was not forthcoming, would have been required to convince younger men to give up recently enhanced gaming technology and go to work instead. JL 

Kerwin Charles reports in Yale School of Management Insights:

Between 2004 and 2017, the weekly hours worked by American men in their 20s fell by 1.8 hours per week, or 4.5%. Men from age 21 to 30 increased their gaming and other recreational computer use by 2.7 hours per week, or 60%, between the period 2004-07 and 2014-17. Demand for gaming would have risen by 22% between 2004-07 and 2014-17 just as a result of the increase in leisure time; the rest of the 60% increase in gaming, therefore, is attributable to the factor that was shifting over time: improved technology. (That) accounts for 75% of the difference between the decline of working hours for young men and hours worked by older men.

Between 2004 and 2017, the weekly hours worked by American men in their 20s fell by 1.8 hours per week, or 4.5%; during the same time period, hours worked by older men fell by just 30 minutes. A study co-authored by Yale SOM Dean Kerwin K. Charles proposes an explanation for much of the gap between the two age groups: video games are getting better.  

The study, co-authored by Mark Aguiar of Princeton University, Mark Bils of the University of Rochester, and Erik Hurst of the University of Chicago and published in the Journal of Political Economy, makes use of time diaries collected by the federal government’s American Time Use Surveys. According to the survey, men from age 21 to 30 increased their gaming and other recreational computer use by 2.7 hours per week, or 60%, between the period 2004-07 and the period 2014-17. (During the same time period, recreational computer use increased by 1.1 hours a week for young women and by .4 hours for older women; it stayed even for older men.) What caused this substantial increase in gaming for young men—and does it explain the drop in working hours for this group? 

Read the study:

• "Leisure Luxuries and the Labor Supply of Young Men"

One likely explanation for the sharp rise in gaming and computing is that it became more appealing as technology improved in the first two decades of the 21st century. But, the researchers point out, overall leisure hours also increased over the same time period for young men. It might be, they write, that various leisure activities “differ in terms of their diminishing returns”—that is, extra hours devoted to video games are more rewarding than extra hours spent playing softball or poker. If that’s the case, the increase in gaming is attributable to more leisure hours, not a change in the gaming itself—and would have happened even if gaming hadn’t gotten better.

In order to tease out whether the increase in gaming and other recreational computing was a result of improved technology, the researchers developed a new method for estimating leisure demand, taking advantage of sudden changes in leisure time like that caused by the Great Recession. Since changes in various leisure activities at such moments can’t be attributed to long-term shifts in preferences or technology, tracking them allowed the researchers to construct a “leisure Engel curve”—a variation on a classic economics graph—showing how demand for a particular leisure activity would rise given the amount of leisure time available.

The data showed a markedly different gaming demand curve for men in their 20s than for other groups. “We find that gaming and recreational computing is distinctively a leisure luxury for younger men but only a modest luxury activity for other groups,” the authors write. “A 1% increase in leisure time is associated with about a 2.5% increase in recreational computing time for younger men, roughly 1 percentage point higher than the elasticity found for other demographic groups.”

According to the leisure Engel curve for young men, the demand for gaming would have risen by 22% between 2004-07 and 2014-17 just as a result of the increase in leisure time; the rest of the 60% increase in gaming, therefore, is attributable to the factor that was shifting over time: improved technology. 

The final step in the study was to understand how improving technology and the resulting demand for gaming affected time spent working. The researchers estimated that the increased demand for gaming by young men effectively increased their “reservation wage”—the minimum pay that they would be willing to accept—by 2.5%. By contrast, improving game technology increased the reservation wage by 1% for young women, and it had no effect on the reservation wage of older workers. The increased reservation wage corresponds to a decrease in working hours of 2.2%—nearly half of the overall decline in working hours for young men. Charles and his co-authors conclude that improved technology accounts for nearly three quarters of the difference between the decline of working hours for young men and the smaller decline in hours worked by older men.