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The Time and Timing Costs of Market Work

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  • Daniel S. Hamermesh
  • Stephen Donald

Abstract

With 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.

Suggested Citation

  • Daniel S. Hamermesh & Stephen Donald, 2007. "The Time and Timing Costs of Market Work," NBER Working Papers 13127, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:13127 Note: AG LS PE
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    1. Benhabib, Jess & Rogerson, Richard & Wright, Randall, 1991. "Homework in Macroeconomics: Household Production and Aggregate Fluctuations," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1166-1187, December.
    2. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
    3. Alan L. Gustman & Thomas L. Steinmeier, 2004. "Minimum Hours Constraints, Job Requirements and Retirement," NBER Working Papers 10876, National Bureau of Economic Research, Inc.
    4. Hamermesh, Daniel S, 1999. "The Timing of Work over Time," Economic Journal, Royal Economic Society, vol. 109(452), pages 37-66, January.
    5. Robert Hutchens & Karen Grace-Martin, 2006. "Employer Willingness to Permit Phased Retirement: Why are Some More Willing Than others?," ILR Review, Cornell University, ILR School, vol. 59(4), pages 525-546, July.
    6. Burda, Michael C. & Hamermesh, Daniel S. & Weil, Philippe, 2006. "The Distribution of Total Work in the EU and US," IZA Discussion Papers 2270, Institute for the Study of Labor (IZA).
    7. Biddle, Jeff E & Hamermesh, Daniel S, 1990. "Sleep and the Allocation of Time," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 922-943, October.
    8. Cogan, John F, 1981. "Fixed Costs and Labor Supply," Econometrica, Econometric Society, vol. 49(4), pages 945-963, June.
    9. Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 969-1006.
    10. Mikal Skuterud, 2007. "Identifying the Potential of Work-Sharing as a Job-Creation Strategy," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 265-287.
    11. Richard B. Freeman & Ronald Schettkat, 2005. "Marketization of household production and the EU–US gap in work," Economic Policy, CEPR;CES;MSH, vol. 20(41), pages 6-50, January.
    12. Gronau, Reuben, 1980. "Home Production-A Forgotten Industry," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 408-416, August.
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    Citations

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    Cited by:

    1. Jay Stewart, 2010. "The Timing of Maternal Work and Time with Children," ILR Review, Cornell University, ILR School, vol. 64(1), pages 181-200, October.
    2. Donald, Stephen G. & Hamermesh, Daniel S., 2009. "A structural model of the fixed time costs of market work," Economics Letters, Elsevier, vol. 104(3), pages 125-128, September.
    3. David Blau & Tetyana Shvydko, 2011. "Labor Market Rigidities and the Employment Behavior of Older Workers," ILR Review, Cornell University, ILR School, vol. 64(3), pages 464-484, April.
    4. Nicoleta Caragea-Hrehorciuc, 2008. "The work in Romania : an analysis of the macroeconomic perspective," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 42(5-6), pages 117-126.
    5. Catalina Amuedo-Dorantes & Sara de la Rica, 2009. "The timing of work and work-family conflicts in Spain sho has a split work schedule and why?," Working Papers 2009-35, FEDEA.
    6. Rogerson, Richard & Wallenius, Johanna, 2016. "Retirement, home production and labor supply elasticities," Journal of Monetary Economics, Elsevier, pages 23-34.
    7. Mark Aguiar & Erik Hurst, 2008. "The Increase in Leisure Inequality," NBER Working Papers 13837, National Bureau of Economic Research, Inc.
    8. Jorge Gonzalez-Chapela, 2005. "On Measuring Convergence in the Use of Time," MEA discussion paper series 05096, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    9. Pagán, Ricardo, 2013. "Time allocation of disabled individuals," Social Science & Medicine, Elsevier, vol. 84(C), pages 80-93.

    More about this item

    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

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