Household Production Time Research Articles

Household Purchasing Productivity: Concept and Consequences

To provide a logically coherent explanation for the high correlations found between a nation’s economic affluence and overall subjective wellbeing, this research takes a micro-macro systems approach. We extend the standard micro theoretical model of the household, by separating purchasing from home production. This separation allows analysis of the opportunity costs in trading-off time and money (as in make or buy decisions) for various household processes. By expanding the household model, a formula is derived to empirically test the relationship between aggregate household income and aggregate household purchasing productivity. The data, although rudimentary, support the hypothesis that growing economic affluence results in greater purchasing productivity. That is, aggregate household demand for marketing output increases more than proportionally to the purchasing time inputs to acquire it; and this increase in household purchasing productivity affords the option of trading off money for time (less make, more buy). Increasing purchasing productivity provides greater opportunities for household satisfaction, ceteris paribus, by freeing up time in household production; thereby providing more time and/or greater quality sensory data input into the consumption process to create satisfaction. Conversely, falling economic affluence has the reverse effect. It results in declining purchasing productivity and the necessity of trading off time for money (more make, less buy). Consequently, reduced opportunity for household satisfaction because of less time and/or lesser quality sensory characteristics input into the consuming process. Thus household purchasing productivity, which explicates the trade-off between make (or time) in home production versus buy (or money) in household purchasing, we argue, provides the linkage to explain a nation’s standard of living and potential happiness.

Equivalence scales for extended income in the U.S

Estimates of extended household income (the sum of market income and the imputed value of non-market household production) should adjust for differences in household size and composition using equivalence scales. However, the equivalence parameters traditionally applied to market income do not plausibly apply to non-market income. Economies of scale in the relationship between living standards and household income are greater for non-market income from household production than market income, and the costs of children relative to adults are higher in household production time than in cash expenditures. Also, the presence of a full-time family caregiver significantly reduces cash expenditures on child care. This paper proposes equivalence scales that can be separately applied to the components of extended income, and demonstrates their empirical relevance with pooled data from the American Time Use Survey for 2010–2014. The proposed parameters significantly alter the relative contribution of non-market income to extended income and modify comparisons of extended income across different family household types, with particularly significant implications for the relative well-being of those with and without full-time family caregivers.

THE HOMOSEXUAL LIFESTYLE: TIME USE IN SAME-SEX HOUSEHOLDS

AbstractWe are among the first to use American time-use data to investigate non-market behavior in gay and lesbian households. We contribute to a literature that has documented a gay disadvantage and lesbian advantage in the labor market. Many have proposed that this pattern reflects, relative to their heterosexual counterparts, higher levels of household labor among gay men and lower levels of household labor among lesbian women. Results show that gay men, parents in particular, spend more time in household production than heterosexual men. We find evidence of different time-use patterns for lesbians, but they are driven by characteristics not sexual orientation. These results also contribute to the economics of the household showing that time use in same-sex households with weaker gender constructs does not conform to the predictions of models that highlight comparative advantage as a source of specialization.

The determinants of housework time

The time household members in industrialized countries spend on housework and shopping is substantial, amounting on average to about half as much time as is spent on paid employment. Women bear the brunt of this burden, a difference that is driven in part by the gender differential in wages. Efforts to reduce the gender wage gap and alter gendered norms of behavior should reduce the gender bias in household production time and reduce inefficiency in home production. Policymakers should also note the impact of tax policy on housework time and consider ways to reduce the distortions caused by sales and income taxes.

Identifying non-cooperative behavior among spouses: Child outcomes in migrant-sending households

I propose a model of household decision-making under asymmetric information and show that resulting allocations may not be fully cooperative. The model yields a simple test for cooperative decision-making, which I apply to data from China. I find that, when the father migrates without his family, children spend more time in household production, while mothers spend less time in both household production and income-generating activities. This is not consistent with standard cooperative models of the household: simply reallocating time to compensate for the father's absence would cause an increase in household labor for both children and mothers and, if migration occurs in response to a negative shock, we should observe an increase in mothers' time in income-generating activities rather than a reduction. The results also do not appear to be driven by an increase in mothers' bargaining power, as children's human capital is not affected by migration, controlling for income.

The great recession and unpaid work time in the United States – Does poverty matter?

Using the 2003–12 American Time Use Survey, this paper establishes the presence of poverty-based differences in the changes in household production time of men and women during the Great Recession, contributing to our understanding of the heterogeneous impact of recession on the well-being of individuals. We find that poor men’s unpaid work time increased whereas nonpoor men’s unpaid work time decreased. Among women, only nonpoor women reduced their unpaid work time. We examine the forces behind these changes using the Oaxaca-Blinder decompositions. The decompositions reveal that poverty-based differences can be partially attributed to shifts in the structure of households whereas gender-based differences to shifts in own and spousal employment status. Nevertheless, sizable portions of the changes in unpaid work time remain unexplained by the shifting individual and household characteristics. The analysis of the unexplained portion of the changes supports the assertion that poverty matters to the adjustments in unpaid work time.

Unemployment in Families: The Case of Housework

Unemployment has consequences for individuals, but its impacts also reverberate through families. This paper examines how families adapt to unemployment in one area of life-time in housework. Using 74,881 observations from 10,390 couples in the Panel Study of Income Dynamics, we estimate fixed effects models and find that individuals spend between 3 and 7 hours more per week in housework when unemployed than when employed, with corresponding decreases of 1 to 2 hours per week in the housework hours of unemployed individuals' spouses. We are the first to show that unemployment is associated both with a reallocation of housework to the unemployed spouse and an increase in the family's total household production time. The results also provide evidence for gender differences in adjustments to the division of labor during unemployment, with wives' unemployment associated with an increase in housework hours that is double the increase for unemployed husbands.

Consumption time in household production: Implications for the goods-time elasticity of substitution

Under some reasonable assumptions, we show analytically that the goods-time elasticity of substitution will be greater if consumption time is not included as an input. An empirical example with food production is consistent with this result.

Whose time? Who saves? Introduction to a special issue on couples’ savings, time use and children

This volume provides a collection of studies on couples’ savings, allocation of time, and children. It brings together three articles on how couples spend their time producing at home and enjoying themselves and one article on how they plan for their future income in the form of savings. A key element of home production is building the future, in the form of parental investments in children. In a later period parenting investments lead to independent self-supporting children living on their own. We also have an article on nest-leaving by grown-up children. Economic analyses of time allocation usually focus on one point in time. Intertemporal investments and financial planning are left aside. In contrast, the literature on savings is all about choices between now and later. Time use studies tend to be ‘micro-economical’; savings research tends to be ‘macro-economical’. Households that save are obviously also the households that allocate their time to individual activities. By simply bringing together articles on savings and home production this special issue of REHO already takes a step towards the integration of the micro and macro literature in household economics, one of the goals of this journal. We are part of a movement towards the integration of time use research into macroeconomics (see for instance, Rogerson and Wallenius 2009) and the development of micro foundations in the literature on household savings (see Browning and Lusardi (1996)). Recent studies have shown that decomposing consumption choices into monetary expenditure and household production time helps reconcile data on income and expenditures (e.g. Baxter and Jermann 1999; Aguiar and Hurst 2005). Macroand micro-economic analyses of the household were juxtaposed and discussed in Grossbard-Shechtman (2003). But this special issue goes further towards an integration of micro foundations into the economic analysis of savings. It features a groundbreaking article by. Patricia Apps and Ray Rees containing both a theoretical model and an empirical analysis of savings

Evidence on Unemployment, Market Work and Household Production

Time-diary data from four countries suggest that differences in market time between the unemployed and employed represent additional leisure and personal maintenance rather than increased household production. U.S. data for 2003-2006 show that almost none of the reduction in market work in areas of long-term high unemployment is offset by additional work at home. In contrast, in those areas where unemployment has risen cyclically, reduced market work is largely substituted by additional time in household production.

Identification and estimation of a class of household production models

AbstractWe consider a class of household production models characterized by a dichotomy property. In these models the amount of time spent on household production does not depend on the household utility function, conditional on household members having a paid job. We analyse the (non‐parametric) identifiability of the production function and the so‐called jointness function (a function describing which part of household production time is counted as pure leisure). It is shown that the models are identified in the two‐adult case, but not in the single‐adult case. We present an empirical application to Swedish time‐allocation data. The estimates satisfy regularity conditions that were violated in previous studies and pass various specification tests. For this data set we find that male and female home production time are q‐substitutes. Copyright © 2003 John Wiley & Sons, Ltd.

Differences in Us-German Time Allocation: Why Do Americans Work Longer Hours than Germans?

The conventional view is that Americans work longer hours than Germans and other Europeans but when time in household production is included, overall working time is very similar on both sides of the Atlantic. Americans spend more time on market work but German invest more in household production. This paper examines whether these differences in the allocation of time can be explained by differences in the incentive structure, this is by the taxwedge and differences in the wage differentials, as economic theory suggests. Its analysis of unique time-use data reveals that the differences in time-allocation patterns can indeed be explained by economic variables.

The Tax Unit and Household Production Comment

In a recent paper published in this Journal, Piggott and Whalley (1996) challenge the conventional wisdom that ‘‘taxing individuals rather than households is preferred from an efficiency point of view’’ (p. 398). They argue ‘‘that once household production is taken into account, things are more complicated since tax design should also not distort the input of family members’ time in household production.’’ They support their view by providing computational results. These results seem to demonstrate that welfare can indeed be enhanced if households are taxed as a unit and not as individuals. This comment sets out to show, however, that their analysis contains some quite critical points. In our opinion, if Piggott and Whalley’s approach is followed through to its end, it only enforces the conventional view. Piggott and Whalley work with an extended family labor supply model. The extension concerns household production expressed by some function N. There are two model variants with different degrees of complexity. In the first variant a representative household is considered and producer prices are held constant. The model serves to demonstrate Piggott and Whalley’s basic line of argumentation within a simple framework. The second variant extends the first one in several respects. Its functional specification is more complex, and it is a general equilibrium model with two household types. The model is parameterized using Australian tax rates and data. It is shown that aggregate welfare gains can occur under well-designed income tax reforms. The reforms are such that the individual tax base is replaced with a household tax base. Additionally, average and marginal tax rates are proportionally adjusted to preserve revenue

Children's time in household work: Estimation issues

The purpose of this article is to analyze children's time in household production using tobit analysis to adjust for nonparticipation and to compare the results to a regression analysis. In general, more variables are significant in each of the analyses based upon gender and birth order of the children. More importantly, the additional variables go beyond whether the day was a schoolday and the age of the child. The past failure of children's time spent in household work to change with differences in their families' characteristics appears to have been an artifact of not accounting for nonparticipation when estimating marginal effects.

HOUSEHOLD INCOME PLUS HOUSEHOLD PRODUCTION: THE DISTRIBUTION OF EXTENDED INCOME IN THE U.K.

This paper provides new estimates of the distribution of extended income amongst non‐elderly, one‐family households in the U.K. by combining household money income data and valuations of household production time. Extended income is substantially more equal than money income and extending the income definition changes income relativities significantly between families with and without earners and between married couple families and singles.

The Tax Unit and Household Production

Under a progressive income tax, conventional wisdom is that taxing individuals rather than households is preferred from an efficiency point of view. The reason is that secondary workers, whose labor supply elasticity is high, will be taxed at a lower marginal rate than primary workers, whose labor supply elasticity is low. Here, we argue that once household production is taken into account, things are more complicated since tax design should also not distort the input of family members' time in household production. Factor input distortions as well as Ramsey considerations thus need to enter the choice of the tax unit. We provide a numerical example of an economy for which a move from an individual to a household basis in the income tax can be efficiency improving. We then use a general equilibrium model, parameterized using Australian tax rates and data, whose results clearly show that welfare gains can occur under changes from an individual to a household basis for an existing income tax. Our results thus challenge conventional wisdom and suggest that household unit taxation deserves more sympathetic consideration than is currently the case.

Household production time by sex and employment status: a cross‐national comparison between Finland and the U.S.A.

Two time‐budget studies, from Finland and the U.S.A., were examined across nations and across sexes with regard to household production time in two parent, two‐child households. Time‐use difference in various household activity categories (basic housework, child‐ and member‐care, maintenance, and shopping and management) were analysed according to respondents' employment status. Three‐way analysis of variance revealed that all three variables, nationality, sex and employment status made a significant difference in the time‐use mean scores. Part‐time employed Finnish men allocated more time to household production than other Finnish men. The equality ratios confirmed that women in both countries carry the heaviest burden in the house‐hold work, especially in traditionally female basic housework tasks. In Finnish households the equality ratios were consistently smaller than in the U.S. households indicating a more egalitarian division of household work. Implications for future cross‐national time‐use research including gender issues are discussed.

The Economics of Moonlighting: A Double Self-Selection Model

The model proposed here for obtaining the labor supply functions of moonlighters uses a double self-selection system to explore the husband's decision to moonlight together with his wife's decision to work. Subsequently, the labor functions are classified under two regimes depending on whether the wife works. The model is estimated based on a cross-section of 4,448 married couples from the Survey of Income and Program Participation, Wave 2. I find that the household production time of husbands and wives are substitutes and that specific human capital deters moonlighting. Copyright 1990 by MIT Press.

Use of time and preferences for time allocation among urban, employed, married women

This study examines the relationship between employed wives' preferences for household production time, employment time, leisure, and their actual time use. A random sample of 235 employed, married women estimate their time use on an average weekday and weekend day in 13 activities and indicate their preferences for time in those activities. Hierarchical multiple regression procedures are used to examine the relationships between actual and preferred time use. Weekday employment time is not related to preferences for more or less time in household production but wives allocating more time to employment want to spend less time at that employment and more time in leisure. Weekend employment time is related to preferences for more time in leisure, child care, and other household work. Time spent performing household work is not related to preferences for more or less time in any activity except the desire for more leisure time on weekends.

Rural‐urban differentials in children's household production time

This research examined the amount of time rural and urban children spent in household production activities, and several demographic factors related to that time use. Data were obtained from a multi‐state family time‐use survey, NE‐113 ‘Use of Time in Rural and Urban Families’. Home interviews were conducted with 2,100 families in II states. The sample consisted of 1,045 rural children and 1,026 urban children, aged 6–17. The hypothesis, that the differentials in time spent in household production by rural and urban children will be due to assignment of tasks by sex, was confirmed. Boys spent similar amounts of time in housework regardless of place of residence, while rural girls spent more time than urban girls.