IDEAS home Printed from https://ideas.repec.org/a/leu/journl/2007vol4p1-29.html
   My bibliography  Save this article

Time use and options for retirement in Europe

Author

Listed:
  • Hannu Piekkola

    (University of Vaasa)

  • Liisa Leijola

    (The Research Institute of the Finnish Economy)

Abstract

This paper examines the incentive effects of market and household work on retirement. This is accomplished by documenting the time use in market and household work in selected European countries. The assignment of an economic value to household work assumes substitutability of market and household work of some degree. With continuous lifetime patterns, household work may also replace market work after retirement. We construct re-placement rates and option values that include the value of household work for 7 European countries. It is shown that the inclusion of household work in calculations on incentives makes the prospect of retiring more attractive, and that the calculation results correlate with actual retirement ages in Europe. Replacement rates are close to or exceed 100% when household work is accounted for. For men the increase in household work after withdrawing from the labour market is larger in relative terms (double on average). Therefore the effect of accounting for household work in the financial incentive to retire is greater for men.

Suggested Citation

  • Hannu Piekkola & Liisa Leijola, 2007. "Time use and options for retirement in Europe," electronic International Journal of Time Use Research, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), vol. 4(1), pages 1-29, September.
    • Handle: RePEc:leu:journl:2007:vol4:p1-29
    as

    Download full text from publisher

    File URL: http://www2.leuphana.de/ffb/eijtur/pdf/volumes/eIJTUR-4-1.pdf#page=2
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kevin M. Murphy & Finis Welch, 1992. "The Structure of Wages," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 285-326.
    2. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 35-78.
    3. Gronau, Reuben, 1977. "Leisure, Home Production, and Work-The Theory of the Allocation of Time Revisited," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1099-1123, December.
    4. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555, Elsevier.
    5. McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-321, May.
    6. Arleen Leibowitz, 1974. "Home Investments in Children," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 432-456, National Bureau of Economic Research, Inc.
    7. Gershuny, Jonathan, 2000. "Changing Times: Work and Leisure in Postindustrial Society," OUP Catalogue, Oxford University Press, number 9780198287872.
    8. Tim Barmby & Nina Smith, 2001. "Household labour supply in Britain and Denmark: some interpretations using a model of Pareto Optimal behaviour," Applied Economics, Taylor & Francis Journals, vol. 33(9), pages 1109-1116.
    9. Anne H. Gauthier & Timothy M. Smeeding & Frank F. Furstenberg, 2004. "Are Parents Investing Less Time in Children? Trends in Selected Industrialized Countries," Population and Development Review, The Population Council, Inc., vol. 30(4), pages 647-672, December.
    10. Francine D. Blau, 1998. "Trends in the Well-Being of American Women, 1970-1995," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 112-165, March.
    11. C. Russell Hill & Frank P. Stafford, 1980. "Parental Care of Children: Time Diary Estimates of Quantity, Predictability, and Variety," Journal of Human Resources, University of Wisconsin Press, vol. 15(2), pages 219-239.
    12. Solomon Polachek, 2003. "How the Human Capital Model Explains Why the Gender Wage Gap Narrowed," LIS Working papers 375, LIS Cross-National Data Center in Luxembourg.
    13. O'Neill, June & Polachek, Solomon, 1993. "Why the Gender Gap in Wages Narrowed in the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 205-228, January.
    14. Peter Gottschalk & Sheldon Danziger, 2005. "Inequality Of Wage Rates, Earnings And Family Income In The United States, 1975–2002," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 231-254, June.
    15. Satvika Chalasani, 2007. "The changing relationship between parents’ education and their time with children," electronic International Journal of Time Use Research, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), vol. 4(1), pages 93-117, September.
    16. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
    17. Datcher-Loury, Linda, 1988. "Effects of Mother's Home Time on Children's Schooling," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 367-373, August.
    18. Sigelman, Lee & Zeng, Langche, 1999. "Analyzing Censored and Sample-Selected Data with Tobit and Heckit Models," Political Analysis, Cambridge University Press, vol. 8(2), pages 167-182, December.
    19. Flood, Lennart & Gråsjö, Urban, 1998. "Regression Analysis and Time Use Data A Comparison of Microeconometric Approaches with Data from the Swedish Time Use Survey (HUS)," Working Papers in Economics 5, University of Gothenburg, Department of Economics.
    20. Belton Fleisher, 1977. "Mother’s home time and the production of child quality," Demography, Springer;Population Association of America (PAA), vol. 14(2), pages 197-212, May.
    21. John Sandberg & Sandra Hofferth, 2001. "Changes in children’s time with parents: United States, 1981–1997," Demography, Springer;Population Association of America (PAA), vol. 38(3), pages 423-436, August.
    22. Jutta M. Joesch & C. Katharina Spiess, 2002. "European Mothers' Time with Children: Differences and Similarities across Nine Countries," Discussion Papers of DIW Berlin 305, DIW Berlin, German Institute for Economic Research.
    23. Suzanne Bianchi, 2000. "Maternal employment and time with children: Dramatic change or surprising continuity?," Demography, Springer;Population Association of America (PAA), vol. 37(4), pages 401-414, November.
    24. Jutta M. Joesch & C. Katharina Spiess, 2006. "European mothers’ time spent looking after children - differences and similarities across nine countries," electronic International Journal of Time Use Research, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), vol. 3(1), pages 1-27, August.
    25. Arleen Leibowitz, 1974. "Home Investments in Children," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 111-135, National Bureau of Economic Research, Inc.
    26. Matthew J. Neidell, 2000. "Early Parental Time Investments In Children's Human Capital Development: Effects Of Time In The First Year On Cognitive And Non-Cognitive Outcomes," UCLA Economics Working Papers 806, UCLA Department of Economics.
    27. Leibowitz, Arleen, 1974. "Home Investments in Children," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 111-131, Part II, .
    28. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-392, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shahid, Pirzada Syed Rizwan, 2023. "Founder's Human Capital and the Entrepreneurial Process Duration," OSF Preprints yf6mg, Center for Open Science.
    2. Ruuskanen, Olli-Pekka, 2006. "Time Use During the Parental Leave and the Return to the Employment," Discussion Papers 1060, The Research Institute of the Finnish Economy.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Monika Hjeds Löfmark, 2007. "Gender and time allocation differences in Taganrog, Russia," electronic International Journal of Time Use Research, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), vol. 4(1), pages 69-92, September.
    2. Jens Bonke & Frederik Gerstoft, 2007. "Stress, time use and gender," electronic International Journal of Time Use Research, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), vol. 4(1), pages 47-68, September.
    3. Oriel Sullivan, 2007. "Cultural voraciousness - A new measure of the pace of leisure in a context of 'harriedness'," electronic International Journal of Time Use Research, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), vol. 4(1), pages 30-46, September.
    4. Satvika Chalasani, 2007. "The changing relationship between parents’ education and their time with children," electronic International Journal of Time Use Research, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), vol. 4(1), pages 93-117, September.
    5. Jonathan Guryan & Erik Hurst & Melissa Kearney, 2008. "Parental Education and Parental Time with Children," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 23-46, Summer.
    6. J. Gimenez-Nadal & Jose Molina, 2013. "Parents’ education as a determinant of educational childcare time," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 719-749, April.
    7. Ruhm, Christopher J., 2008. "Maternal employment and adolescent development," Labour Economics, Elsevier, vol. 15(5), pages 958-983, October.
    8. Kertesi, Gábor & Kézdi, Gábor & Hajdu, Tamás, 2022. "Idő és pénz a gyermeknevelésben Magyarországon, 1993-2010 [Time and money in raising children in Hungary, 1993-2010]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1255-1297.
    9. Anne H. Gauthier & Timothy M. Smeeding & Frank F. Furstenberg, Jr., 2004. "Do We Invest Less Time in Children? Trends in Parental Time in Selected Industrialized Countries Since the 1960's," Center for Policy Research Working Papers 64, Center for Policy Research, Maxwell School, Syracuse University.
    10. Garey Ramey & Valerie A. Ramey, 2010. "The Rug Rat Race," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 129-199.
    11. Zhu, Guozhong & Vural, Gulfer, 2013. "Inter-generational effect of parental time and its policy implications," Journal of Economic Dynamics and Control, Elsevier, vol. 37(9), pages 1833-1851.
    12. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2010. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States: 1967-2006," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 15-51, January.
    13. Juan Carlos, Campaña & J. Ignacio, Giménez-Nadal & Jose Alberto, Molina, 2017. "Self-employment and educational childcare time: Evidence from Latin America," MPRA Paper 77360, University Library of Munich, Germany.
    14. Felfe, Christina & Hsin, Amy, 2012. "Maternal work conditions and child development," Economics of Education Review, Elsevier, vol. 31(6), pages 1037-1057.
    15. Benjamín Villena-Rodán & Cecilia Ríos-Aguilar, 2011. "Causal Effects of Maternal Time-Investment on Children's Cognitive Outcomes," Documentos de Trabajo 285, Centro de Economía Aplicada, Universidad de Chile.
    16. Fabián Slonimczyk, 2013. "Earnings inequality and skill mismatch in the U.S.: 1973–2002," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(2), pages 163-194, June.
    17. Frederiksen, Anders & Poulsen, Odile, 2010. "Increasing Income Inequality: Productivity, Bargaining and Skill-Upgrading," IZA Discussion Papers 4791, Institute of Labor Economics (IZA).
    18. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U. S. Wage Inequality: Re-Assessing the Revisionists," Harvard Institute of Economic Research Working Papers 2095, Harvard - Institute of Economic Research.
    19. Gimenez-Nadal, José Ignacio & Molina, José Alberto, 2020. "The Gender Gap in Time Allocation in Europe," IZA Discussion Papers 13461, Institute of Labor Economics (IZA).
    20. Juan Carlos Campaña & J. Ignacio Giménez-Nadal & José Alberto Molina, 2020. "Self-employed and Employed Mothers in Latin American Families: Are There Differences in Paid Work, Unpaid Work, and Child Care?," Journal of Family and Economic Issues, Springer, vol. 41(1), pages 52-69, March.

    More about this item

    Keywords

    Retirement; option value; time use; leisure; household work; option value;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:leu:journl:2007:vol4:p1-29. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Merz (email available below). General contact details of provider: https://edirc.repec.org/data/fbluede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.