Working Paper: NBER ID: w17259
Authors: Mark A. Aguiar; Erik Hurst; Loukas Karabarbounis
Abstract: We use data from the American Time Use Survey (ATUS), covering both the recent recession and the pre-recessionary period, to explore how foregone market work hours are allocated to other activities over the business cycle. Given the short time series, it is hard to distinguish business cycle effects from low frequency trends by simply comparing time spent on a given category prior to the recession with time spent on that category during the recession. Instead, we identify the business cycle effects on time use using cross state variation with respect to the severity of the recessions. We find that roughly 30% to 40% of the foregone market work hours are allocated to increased home production. Additionally, 30% of the foregone hours are allocated to increased sleep time and increased television watching. Other leisure activities absorb 20% of the foregone market work hours. We use our evidence from the ATUS to calibrate and test the predictions of workhorse macroeconomic models with home production. We show that the quantitative implications of these models regarding the allocation of time over the business cycle matches reasonably well the actual behavior of households.
Keywords: Time Use; Recessions; Home Production; Labor Supply
JEL Codes: D13; E32; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| foregone market work hours (J29) | increased home production (D13) |
| foregone market work hours (J29) | increased sleep and television watching (J22) |
| foregone market work hours (J29) | increased leisure activities (J22) |
| foregone market work hours (J29) | job search (J68) |
| foregone market work hours (J29) | investments in personal health, education, and civic activities (D14) |
| recession (E32) | changes in market work (J29) |
| changes in market work (J29) | reallocations to various time use categories (J29) |