The Time and Timing Costs of Market Work
AbstractWith 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.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13127.
Date of creation: May 2007
Date of revision:
Publication status: published as "A Structural Model of the Fixed Time Costs of Market Work" Donald, Stephen G.; Hamermesh, Daniel S.; Economics Letters, September 2009, v. 104, iss. 3, pp. 125-28
Note: AG LS PE
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Find related papers by JEL classification:
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-02 (All new papers)
- NEP-LAB-2007-06-02 (Labour Economics)
- NEP-LTV-2007-06-02 (Unemployment, Inequality & Poverty)
- NEP-UPT-2007-06-02 (Utility Models & Prospect Theory)
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