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Taxes and Time Use: Fiscal Policy in a Household Production Model

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  • Kelly S. Ragan

Abstract

Time use data on work and leisure is presented for a broad group of OECD countries. The home production model explicitly accounts for taxes and public expenditures on day care and elder care, substitutes for work households perform at home. Taxes are important for matching time use patterns in Canada, the UK, and continental Europe, but cannot explain the high levels of market work and low levels of home work observed in Scandinavia. Subsidies of services like day care that substitute for home work are shown to be quantitatively important for bringing both market and home work predictions in line with the data. (JEL D13, E62, J13, J14)

Suggested Citation

  • Kelly S. Ragan, 2013. "Taxes and Time Use: Fiscal Policy in a Household Production Model," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 168-192, January.
    • Handle: RePEc:aea:aejmac:v:5:y:2013:i:1:p:168-92
    Note: DOI: 10.1257/mac.5.1.168
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    References listed on IDEAS

    as
    1. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 28(Jul), pages 2-13.
    2. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
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    More about this item

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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