Abstract
Retirement ages among older Americans have only recently begun to increase after their precipitous fiftyyear decline. Early retirement may result from incentives provided by retirement systems; but it may also result from the rigidities imposed by market work schedules. Using the American Time Use Survey of 2003, I first examine whether additional market work is neutral with respect to the mix of non-market activities. The estimates indicate that there are fixed time costs of remaining in the labor market that alter the pattern of non-market activities, reducing leisure time and mostly increasing time devoted to household production. These costs impose a larger burden on households with lower full incomes, since wealthier households apparently purchase market substitutes that allow them to maintain the mix of nonmarket activities when they undertake market work. Market work also raises the set-up costs of switching among different non-market activities, thus raising the costs of generating utility-increasing variety. It also alters the daily distribution of a fixed amount of non-market activities, away from the distribution chosen when the constraint of a work schedule is not present. All these effects are mitigated by higher family income, presumably because higher-income people can purchase market substitutes that enable them to overcome the fixed time costs of market work.
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