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Allocating Time : Individuals' Technologies, Household Technology, Perfect Substitutes, and Specialization

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  • Robert A. POLLAK

Abstract

In an efficient household if the spouses' time inputs are perfect substitutes, then spouses will “specialize" regardless of their preferences and the governance structure. That is, both spouses will not allocate time to both household production and the market sector. The perfect substitutes assumption implies that spouses' "unilateral" production functions (i.e., the household production function when only one spouse allocates time to home production) are closely related, satisfying a highly restrictive condition that I call "compatibility." I introduce the “correspondence assumption,” which postulates that the unilateral production functions in a newly formed household coincide with individuals’ production functions before they enter marriage. The correspondence assumption provides a plausible account of the genesis of household technology and simplifies its estimation. I introduce the "additivity assumption” which postulates that the household production function is the sum of the spouses' unilateral production functions and argue that additivity is implicit in much of the new home economics. Together, the correspondence and additivity assumptions imply that individuals’ technologies reveal the entire household technology. I show that perfect substitutes, additivity and concavity imply that the household production function is of the same form as the unilateral production functions, exhibits constant returns to scale, and depends on the spouses' total time inputs, measured in efficiency units.

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Bibliographic Info

Article provided by ENSAE in its journal Annals Of Economics and Statistics.

Volume (Year): (2012)
Issue (Month): 105-106 ()
Pages: 5

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Handle: RePEc:adr:anecst:y:2012:i:105-106:p:5

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  1. Marc Nerlove, 1974. "Household and Economy: Toward a New Theory of Population and Economic Growth," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 200-221 National Bureau of Economic Research, Inc.
  2. Robert Pollak, 2003. "Gary Becker's Contributions to Family and Household Economics," Review of Economics of the Household, Springer, vol. 1(1), pages 111-141, January.
  3. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  4. Shelly Lundberg & Robert A. Pollak, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-158, Fall.
  5. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Discussion Papers in Economics at the University of Washington 91-08, Department of Economics at the University of Washington.
  6. Shelly Lundberg & Robert A. Pollak, 2007. "The American Family and Family Economics," NBER Working Papers 12908, National Bureau of Economic Research, Inc.
  7. Chiappori, P.A., 1989. "Collective Labour Supply and Welfare," DELTA Working Papers 89-07, DELTA (Ecole normale supérieure).
  8. Szenberg, Michael & Ramrattan, Lall & Gottesman, Aron A. (ed.), 2006. "Samuelsonian Economics and the Twenty-First Century," OUP Catalogue, Oxford University Press, number 9780199298839.
  9. Griliches, Zvi, 1974. "Household and Economy: Toward a New Theory of Population and Economic Growth: Comment," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S219-S221, Part II, .
  10. Liliana E. Pezzin & Robert A. Pollak & Barbara S. Schone, 2006. "Efficiency in Family Bargaining: Living Arrangements and Caregiving Decisions of Adult Children and Disabled Elderly Parents," NBER Working Papers 12358, National Bureau of Economic Research, Inc.
  11. Oliver E. Williamson, 2002. "The Theory of the Firm as Governance Structure: From Choice to Contract," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 171-195, Summer.
  12. Lundberg, Shelly & Pollak, Robert A, 1994. "Noncooperative Bargaining Models of Marriage," American Economic Review, American Economic Association, vol. 84(2), pages 132-37, May.
  13. Becker, Gary S, 1985. "Human Capital, Effort, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages S33-58, January.
  14. Nancy Folbre, 1995. ""Holding hands at midnight": The paradox of caring labor," Feminist Economics, Taylor & Francis Journals, vol. 1(1), pages 73-92.
  15. Juster, F. Thomas & Stafford, Frank P., 1990. "The Allocation of Time: Empirical Findings, Behavioural Models, and Problems of Measurement," Working Paper Series 258, Research Institute of Industrial Economics.
  16. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
  17. Pollak, Robert A, 1985. "A Transaction Cost Approach to Families and Households," Journal of Economic Literature, American Economic Association, vol. 23(2), pages 581-608, June.
  18. Robert A. Pollak, 2007. "Bargaining Around the Hearth," NBER Working Papers 13142, National Bureau of Economic Research, Inc.
  19. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
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Cited by:
  1. Robert A. Pollak, 2013. "Allocating Household Time: When Does Efficiency Imply Specialization?," NBER Working Papers 19178, National Bureau of Economic Research, Inc.
  2. Robert J. McCann & Xianwen Shi & Aloysius Siow & Ronald Wolthoff, 2012. "Becker Meets Ricardo: Multisector Matching with Social and Cognitive Skills," Working Papers tecipa-454, University of Toronto, Department of Economics.
  3. Halldén, Karin & Stenberg, Anders, 2013. "The Relationship between Hours of Domestic Services and Female Earnings: Panel Register Data Evidence from a Reform," Working Paper Series 4/2013, Swedish Institute for Social Research.
  4. Xianwen Shi & Ronald Wolthoff & Aloysius Siow & Robert McCann, 2012. "Becker meets Ricardo: A social and cognitive skills model of human capabilities," 2012 Meeting Papers 32, Society for Economic Dynamics.

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