Working Paper: NBER ID: w13127
Authors: Daniel S. Hamermesh; Stephen Donald
Abstract: With the American Time Use Survey of 2003 and 2004 we first examine whether additional market work has neutral impacts on the mix of non-market activities. The estimates indicate that fixed time costs of market work alter patterns of non-market activities, reducing leisure time and mostly increasing time devoted to household production. Similar results are found using time-diary data for Australia, Germany and the Netherlands. Direct estimates of the utility derived from goods consumption and two types of non-market time in the presence of these fixed costs indicate that they generate a utility-equivalent of as much as 8 percent of income that must be overcome before market work becomes an optimizing choice. Market work also alters the timing of a fixed amount of non-market activities during the day, away from the schedule chosen when market work imposes no timing constraints. All of these effects are mitigated by higher family income. The results provide a new supply-side explanation for the frequently observed discrete drop from full-time work to complete retirement.
Keywords: time use; market work; nonmarket activities; household production; labor supply
JEL Codes: D13; J22; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Market work (G10) | Shifts allocation of nonmarket time away from leisure and towards household production (D13) |
| Family income (D31) | Moderates negative impacts of market work on leisure time (J29) |
| Fixed time costs of market work (J29) | Impedes optimizing allocation of time across nonmarket activities (D13) |
| Beginning market work (G10) | Reduces leisure time (J22) |
| Beginning market work (G10) | Increases time spent on household production (D13) |