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Effects of wage shocks and saving changes on leisure time: The role of dynamic intra-household commitment

Author

Listed:
  • Ignacio Belloc

    (University of Zaragoza)

  • Pierre-André Chiappori

    (Columbia University)

  • José Alberto Molina

    (IEDIS, Universidad de Zaragoza)

  • Jorge Velilla

    (IEDIS, University of Zaragoza)

Abstract

The ability of spouses to commit to future behaviors has important implications for the design of policy interventions targeting specific household members. Using longitudinal data from the Japanese Panel Survey of Consumers (1993-2019), we find robust evidence consistent with limited commitment: positive own past wage shocks increase current leisure, while positive current husband wage shocks reduce the wife’s leisure. Additionally, changes in the wife’s private savings have lasting negative effects on the husband’s leisure time, as limited commitment predicts. These findings extend previous tests of commitment and underscore the importance of accounting for historical changes in the household’s economic environment.

Suggested Citation

  • Ignacio Belloc & Pierre-André Chiappori & José Alberto Molina & Jorge Velilla, 2025. "Effects of wage shocks and saving changes on leisure time: The role of dynamic intra-household commitment," Boston College Working Papers in Economics 1099, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:1099
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    Keywords

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    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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