One section of the preceding chapter described the effect of shift-work on factor prices in a general-equilibrium static model. The stock of capital and the total labor force were assumed to be given. The present chapter will analyze the effect of shift-work in a growth model, in which the stock of capital is the result of the accumulation of past savings.

To see more clearly the differences between the general-equilibrium model and the growth model, let us imagine a one-sector static macroeconomic model in which capital utilization is a variable. The stock of capital and the labor force are given. It is obvious that an increase in capital utilization will increase total output and the wage rate. These gains may be called the static effects of the utilization change. Now let us convert our static macroeconomic model into a growth model in which the labor force grows exogenously and the capital stock at any given time is the accumulation of past savings. In the growth model an increase in utilization at any given time will still have the static effects on output and the wage rate, but it may also change the rate of capital accumulation and hence the ratio of capital stock to labor. If an increase in utilization leads to a higher capital-stock-to-labor ratio than would have existed otherwise, then we may say that utilization is more powerful in a growth context than in a static context.