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2015-05-28 06:14:01
May 27th 2015, 14:32 by C.W. | LONDON
THORSTEIN VEBLEN, an economist who dabbled in sociology, reckoned that the best-off members of a community established the standards that everyone else followed. Less-well-to-do individuals, he reckoned, tried to emulate the well-off and signal their worth through things like "conspicuous consumption" or "conspicuous leisure".
In Veblen's day, leisure was a badge of honour. But as we have argued in the past, these days work is rather modish. Hanging around at home is not seen as a sign of success, as it was for Veblen, but a sign of uselessness. Devising whizzy computer code, or solving complex financial problems, now has social status. Such work is also paid really well. All this means that over time, working hard has become cool. The share of college-educated American men regularly working more than 50 hours a week rose from 24% in 1979 to 28% in 2006, but fell for high-school dropouts. Highly educated people take less leisure time than they did fifty years ago.
All this suggests that as people at the top do better and better, those at the bottom will want to work harder too, in order to emulate them. One study indeed found a "Veblen effect", which showed that as income inequality rose, working hours for the less-well-to-do rose too.
But a new paper, from two economists at Monash Business School, suggests that the tide may be turning. Using relatively recent data on workers in Australia's six states and two territories, it finds the opposite. As income inequality rose, it finds, Australians decided to work fewer hours. A 1% rise in the Gini coefficient, a measure of economic inequality, ends up resulting in a 0.2% decline in working hours.
The economists' explanations for this result are not terribly enlightening (indeed, the paper as a whole is written rather badly). But one reason could be a "sour grapes" explanation: income gaps get so large that people lose interest in work altogether, since they know they will never be rich enough. Instead of going out to work, they may sit and relax on their porch all day long instead.