Labor Supply and Innovation in Entertainment: Evidence from TV
We test how innovations in home entertainment affect labor supply and contributed to declining employment rates. To identify the effect, we track exposure to TV during the initial introduction in the US and exploit the staggered deployment of television across local areas of the US in a differences-in-differences analysis. Employment information from historical Social Security records show that the rollout of television resulted in a significant decline in employment, with a 0.5% decline in the employment-to-population ratio after the launch of a television channel. The main response comes from increases in retirement rates when television provides a source of easily accessible entertainment. Our estimates suggest that an hour spend with television crowds out 3 minutes of work and imply that few other leisure innovations had a big enough impact to materially affect aggregate labor supply.