Play over pay – how video games are denting America’s economy

A new study has suggested that improvements in ‘leisure luxuries’, namely video games, are keeping young men from entering the labour force

 
The study implies, though doesn't prove, that improvements in video games might be keeping young men from participating wholeheartedly in the labour market 

A new published by the US National Bureau of Economic Research has concluded that improvements in video games are playing a role in the decline in labour force participation among young men. The paper proposes the idea that an improvement in the quality of leisure activities is changing the way young men approach the value of their leisure time versus the value of a paycheque from work.

The results suggest that young men in particular are choosing to rely on their parents financially in order to expand their tech-enhanced leisure time. While eight percent of younger men were not in work in 2000, this number rose to 15 percent in 2016. Meanwhile, those who aren’t working are now far more likely to be living with a ‘close relative’, suggesting their choice not to work is increasingly being enabled by parents.

The unsettling implication is that video games could be to blame for some of the slack in the US economy

The unsettling implication is that video games could be to blame for some of the slack in the US economy, which is being strained by a protracted decline in labour force participation. What’s more, by choosing against work while they are young, these gamer-men are likely to be damaging their employment and earnings prospects for the future, which again involves troubling economic implications for the US.

Using time-use data, the paper shows that since 2004, young men have “distinctly shifted” their use of leisure time to video gaming and other recreational computer activities. Meanwhile, younger men aged 21 to 30 have exhibited a larger decline in work hours over the last fifteen years than any other demographic. And yet, correlation does not imply causation, and the paper continues to explore whether these two trends can really be connected.

“We propose a framework to answer whether improved leisure technology played a role in reducing younger men’s labor supply,” explained the paper, which was written by academics from the University of Princeton, the University of Chicago and the University of Rochester. The academics’ framework involves digging in to the “leisure demand system” of young men, meaning their tendency to prioritise leisure time over going to work.

Their models show that this leisure demand is particularly sensitive to innovations in ‘leisure luxuries’. Moreover, the decline was also specifically linked to the rise of gaming and recreational computer use. More specifically, they calculated that innovations to gaming and recreational computing since 2004 can explain around half of the increase in leisure for younger men, accounting for a decline in market hours of 1.5 to 3.0 percent.

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