Incentive for the Homogenization of Time Use

Abstract

An increasing variety of phenomena involve the mixing of market work and leisure, or market work and home production, both by individuals and across household members. The growth of vacations, holidays and days absent from work; the rise in part-time employment and the reduction in moonlighting; and the convergence between the sexes of labor - force participation rates and of time spent in household production, are all demonstrated by data for a number of developed countries. This phenomenon, an increasing consumption of mixed leisure, is examined in the context of a model in which the consumption of one commodity reduces the market wage. 14 income dominate substitution effects, as time-series evidence on the demand for leisure suggests they do,higher full incomes will increase the demand for mixed leisure. Similarly, greater differences between tax rates on market work and on mixed leisure will also increase the demand for the latter.Whether the growth of mixed leisure has resulted from changing tax incentives or increased full incomes is not clear, but some weak formal evidence for the latter cause is presented. The implications of expanded consumption of mixed leisure for earnings inequality and for the welfare effects of unemployment are discussed, and some approaches to testing the theory of the demand for mixed leisure are suggested.