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Beware of Workaholics: Household Preferences and Individual Equilibrium Utility

Author

Listed:
  • Gersbach, Hans

    () (ETH Zurich)

  • Haller, Hans

    () (Virginia Tech)

Abstract

This paper analyzes the effects of sociological changes in the form of a shift of influence within two-member households participating in labor and product markets. The most striking effects occur when household members differ in individual preferences and enjoy positive leisure-dependent externalities. For instance, a global sociological change where the “workaholic" member becomes more influential in each working class household can render the working class worse off. A binding restriction on the number of hours an individual is allowed to work can benefit all workers.

Suggested Citation

  • Gersbach, Hans & Haller, Hans, 2005. "Beware of Workaholics: Household Preferences and Individual Equilibrium Utility," IZA Discussion Papers 1502, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1502
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    References listed on IDEAS

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    1. Haller, Hans, 2000. "Household Decisions and Equilibrium Efficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(4), pages 835-847, November.
    2. Jennifer Hunt, 1998. "Hours Reductions as Work-Sharing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 339-381.
    3. Entorf, Horst & Konig, Heinz & Pohlmeier, Winfried, 1992. " Labor Utilization and Nonwage Labor Costs in a Disequilibrium Macro Framework," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(1), pages 71-83.
    4. Saint-Paul, Gilles, 2000. "The Political Economy of Labour Market Institutions," OUP Catalogue, Oxford University Press, number 9780198293323.
    5. Auerbach, Alan J., 1985. "The theory of excess burden and optimal taxation," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 1, chapter 2, pages 61-127 Elsevier.
    6. Clemenz, Gerhard, 1990. "Non-sequential consumer search and the consequences of a deregulation of trading hours," European Economic Review, Elsevier, vol. 34(7), pages 1323-1337, November.
    7. Hans Gersbach & Hans Haller, 2001. "Collective Decisions and Competitive Markets," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 347-368.
    8. Bean, Charles R, 1994. "European Unemployment: A Survey," Journal of Economic Literature, American Economic Association, vol. 32(2), pages 573-619, June.
    9. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    10. Weiss, Yoram, 1996. "Synchronization of Work Schedules," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(1), pages 157-179, February.
    11. Paul R. Krugman, 1994. "Past and prospective causes of high unemployment," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Jan, pages 49-98.
    12. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February.
    13. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    14. Donald A. Walker (ed.), 2000. "Equilibrium," Books, Edward Elgar Publishing, volume 0, number 1585.
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    Cited by:

    1. Pierre Cahuc & André Zylberberg, 2008. "Reduction of working time and unemployment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00255770, HAL.

    More about this item

    Keywords

    externalities; general equilibrium; household behavior; labor supply;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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