It's a thesis that's too good to check and a Black Mirror episode you've already seen: Video games are getting so compelling that they're keeping young American men out of work. The argument received a shot of empiricism recently when a group of ...
It’s a thesis that’s too good to check and a Black Mirror episode you’ve already seen: Video games are getting so compelling that they’re keeping young American men out of work.
The argument received a shot of empiricism recently when a group of economists published a working paper that found young men in 2015 spent 25 to 50 hours a year playing video games when they could have been working, compared with 2004.
The researchers—Kerwin Kofi Charles and Erik Hurst of the University of Chicago, Mark Aguiar of Princeton, and Mark Bils of the University of Rochester—start with the observation that the hours worked by young men aged 21 to 30 have fallen 12% from their peak in 2000 to 2015. For older men aged 31 to 55, the fall in hours worked was 8% over the same period.
Does the appeal of video games explain the difference?
The simplest explanation, perhaps, is that younger workers bore the brunt of the recession in 2008. When labor markets are loose and employers can afford to be picky, experienced workers are expected to find work more easily.
This posits a “demand-side” explanation to the problem of young male employment—the economy isn’t providing enough opportunities for workers with lower skill levels. The authors suggest that this answer is deficient because real wages have stayed the same for both older and younger workers—a dismissal that comes with an important reservation we’ll get into later. (We reached out to the authors to discuss their work but didn’t hear back by press time.)
First, let’s investigate the “supply side” of the equation—is the real problem that many young men aren’t out looking for work because they are gaming instead?
The allure of the digital
The researchers used national time-use surveys to build a model that estimates how young men value their leisure time, comparing two three-year periods, 2004-2007 and 2012-2015. Between those two periods, average leisure time increased by 2.3 hours a week among young men, more than any other cohort, and more than half of that increase—1.4 hours a week—was attributed to time playing video games.
Comparing the way leisure has changed—increasing recreational computer use over passive screen-time like TV, socializing, or the tantalizingly vague “other leisure”—the researchers find that young men are likely to see video games not just as leisure luxury, but as the leisure luxury. Estimating this value gave the researchers numbers to plug into equations that economists use to understand how someone’s use of time outside work affects their willingness to work.
In the researchers’ model, the rise in how much young people value games over time predicts a drop in hours of between 1.5% and 3%, which the authors say explains the bulk of the 4% disparity with older workers who don’t value video games as much. (Recall that the disparity in question arises from the 12% decline in hours worked for young people, versus an 8% decline for older workers, between 2000 and 2015.)
In other words, the reason younger men are working less than their older peers is that they’d rather be playing video games.
There are a few assumptions that are worth pointing out before we start talking about technology and kids today.
Almost the entire sample of young men—75%—are low-skilled workers. This is because the researchers exclude full-time students under 25, which would distort the study by including a lot of people who aren’t really participating in the labor market. But comparing a cohort of low-skilled workers to a cohort of all skill levels—the older workers—carries a similar risk of distortion.
That gets at an issue with the data underlying these assumptions: The researchers note that among the attractions of newer video games is that they provide more opportunity for socializing with other people online. But the data in the survey forces a distinction between socializing and video games. If some chunk of the reported increase in video-game time is actually a substitute for socializing, that means video games aren’t necessarily a unique factor—they are simply a modern way of hanging out with friends. The researchers note that young men reported rising overall satisfaction during the period of the study.
The very model of a modern major market mess
The authors of the paper cite a key caveat when dismissing the idea that low wages, and not cheap video games, keep young people out of work. It is a typical concern in many economic debates, because it centers on the difficulty of untangling cause and effect when prices change—is it a question of supply or demand?
The researchers dismiss the idea of falling demand for workers leading to lower hours among young men because their real wages fell at roughly the same rate as unskilled older workers. They assume that if older men were preferred by employers, their wages would be higher.
But they recognize that other economic research challenges this assumption: Younger workers, faced with stagnant or declining real wages, calculate how taking a job will affect their lifetime income. If they think that work experience isn’t going to lead to higher future wages—say, a low-skilled job with little prospect for advancement—they are less likely to take just any job.
In econo-speak, this is known as raising the “reservation wage”—that is, the lowest pay a worker will accept for taking a job. An older worker, with more immediate need for earnings and a shorter career time horizon, may have a lower reservation wage than a younger one.
“Our work complements these papers by showing that innovations to computer leisure also raised the reservation wage for younger men,” the researchers behind the video-game paper wrote. “Because younger men are predicted to respond more to these leisure innovations, our findings also help to explain the sharp divergence in work hours between younger and older men that started in the mid-2000s.”
The big question, then, is what had a larger effect on the reservation wage for young men: supply-side changes like better video games that make spending time at work less attractive, or demand-side changes, like falling real wages that make some jobs not worth taking?
It’s also worth considering the price of other investments that lead to bigger salaries: The cost of a university-level education or a move to a high-productivity metro area can be prohibitive for low-skill workers who rely on low-wage jobs. Spending more time playing video games, in this instance, seems less indulgent as a result.
A list of my demands
Ernie Tedeschi, a former US Treasury Department economist who is now a researcher in the private sector, is skeptical of the significance of video games in driving down working time for young men.
He put together the data in the following chart, which compares the average weekly hours of young men, excluding full-time students, and a series which predicts the change in their hourly work based on common factors for US workers with 102 different combinations of age, sex, and education. What it shows, in effect, is a strong correlation between the average hours young men work and fundamental economic factors.
“This isn’t a slam dunk or a silver bullet against the Aguiar et. al. paper by any means, but it does make me skeptical (in tandem with other things) that video games play a meaningful explanatory role in young male labor market margins when this common factor is so significant,” Tedeschi says. “Hours themselves seem to be recovering at a healthy clip… the issue for young men appears to be that hours hadn’t fully recovered from the 2001 recession before the 2008 crisis hit. Put another way, young men seem to have had two really bad recessions in 2001 and 2008, without adequate time to recover in between.”
Indeed, since the end of 2015, working hours for young men have increased by 2.3%, to almost 33 hours a week as of May 2017. They are still 6.7% below their (fairly bubblicious) peak of 35.2 hours in 2000, though.
It’s worth noting that, despite the picture you may have of a young man locked in his parents’ basement, living his life entirely on an MMORPG, the reality isn’t that dismal: The average non-employed young man who wasn’t a full-time student between 2012 and 2015 spent more than twice as much time searching for jobs or pursuing educational opportunities (14.1 hours a week) than playing video games (5.9 hours). Only 4% of non-employed young men who weren’t enrolled in full-time education between 2012 and 2015 spent more than six hours a day using a computer for recreation.
The novelty of this research is that it identifies the marginal effect that some passionate gamers have on the US workforce. But its most important contribution is to highlight how most of the reduction in hours worked by young men has nothing to do with video games, and even the disparity between their hours and those of older workers is largely unexplained by new technology.
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