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A note on parental time allocation

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  • Minagawa, Junichi
  • Upmann, Thorsten

Abstract

We explore the implications of the generalised Alchian–Allen theorem for the labour-leisure-child-care decision of a mother with young children. In this framework we find: (i) For mothers who work only a few hours a week, a rise in wages arguably increases the demand for leisure relative to parental child care; (ii) given empirical evidence that an increase in wages induces mothers to spend less time on leisure and more with children, the generalised Alchian–Allen theorem implies that this requires the income elasticity of parental child care to be substantially higher than that of leisure. This finding, though, imposes substantial restrictions on reasonable specifications of a mother's utility function.

Suggested Citation

  • Minagawa, Junichi & Upmann, Thorsten, 2013. "A note on parental time allocation," Labour Economics, Elsevier, vol. 25(C), pages 153-157.
  • Handle: RePEc:eee:labeco:v:25:y:2013:i:c:p:153-157
    DOI: 10.1016/j.labeco.2013.03.004
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    Keywords

    The Alchian–Allen theorem; Income and endowment effects; Labour-leisure-child-care choice; Asymmetric income elasticities; Specification of a utility function;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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