Working Paper: NBER ID: w18643
Authors: Daiji Kawaguchi; Jungmin Lee; Daniel S. Hamermesh
Abstract: How would people spend time if confronted by permanent declines in market work? We identify preferences off exogenous cuts in legislated standard hours that raised employers' overtime costs in Japan around 1990 and Korea in the early 2000s. We estimate the probability that an individual was affected by the reform and relate it to changes in time use based on time diaries. Reduced-form estimates show that the direct effect on a newly-constrained worker was a substantial reduction in market time, with the freed-up time in Japan reallocated to leisure, but in Korea also showing some impact on household production. Simulations using GMM estimates of a Stone-Geary utility function defined over time use suggest no effect on household production in either country. Estimation of a household model shows only slight evidence that spouses shared the time gift, nor that one spouse's allocation of non-market time changed when the other spouse's market work was permanently and exogenously reduced.
Keywords: time allocation; market work; household production; legislated work hours; Japan; Korea
JEL Codes: D13; E21; J22; J23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| spouse's market work changes (D13) | spouse's time allocation (D13) |
| legislative changes (K16) | decrease in market work hours (J29) |
| decrease in market work hours (J29) | increase in leisure time (J29) |
| decrease in market work hours (J29) | increase in personal activities (D14) |
| decrease in market work hours (J29) | increase in household production (D13) |
| decrease in market work hours (J29) | more personal time (D14) |
| decrease in market work hours (J29) | increase in leisure activities (J29) |