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Family Time Use: Leisure, Home Production, Market Work, and Work Related Travel
Author(s): Eric J. Solberg and David C. Wong
Source: The Journal of Human Resources, Vol. 27, No. 3 (Summer, 1992), pp. 485-510
Published by: University of Wisconsin Press
Stable URL: http://www.jstor.org/stable/146173 .
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OF HUMAN
RESOURCES
* XXVII * 3
486
I. Introduction
Increasingly, studies of labor supply have focused on the
joint allocation of time within the household.1 Moreover, some studies
have identified the allocation of time among leisure, home production,
and market work as important to understanding the labor supply decisions of households.2 An early study along these lines is by Gronau
(1977), while a more recent study is by Graham and Green (1984).3
In his paper, Gronau (1977) constructs a model for a married woman
where the husband's decision is exogenous. Gronau's model is formally
that of one individual who allocates time to leisure, home production and
market work.4 Gronau assumes that home time produces a good that is
a perfect substitute for a composite good that may be purchased on the
market. He tests his model's predictions by using data from the 1972
panel of the Michigan Study of Income Dynamics. He concludes that
there is strong support for his version of the neoclassical time-use model.
In their paper, Graham and Green (1984) extend the Gronau model
to a two wage-earner household and allow for jointness between home
production and leisure. Their focus is on the estimation of the household
consumption technology that consists of a Cobb-Douglas function and a
"jointness" function. They estimate an equation for the home production
time for the wife using data from the Panel Study of Income Dynamics
for 1976 and provide estimates for the value of home production. They
show that their parameter estimates are sensitive to the assumptions and
constraints on the household technology.
Kooreman and Kapteyn (1987) have shown that Graham's and Green's
extension of the Gronau model has the same comparative statics as the
original, but they do not test the predictions of that model. Allowing for
"jointness" between home production and leisure in the manner of Graham and Green leaves the separability between production and consumption in the household intact, and it is the separability property that drives
1. For surveys of research on labor supply, see Pencaval (1986) and Killingsworthand
Heckman(1986). For studies of joint labor supply, see Ashenfelterand Heckman(1974),
Wales and Woodland(1977), and Joll et al. (1983).
2. A survey of models incorporatinghome productionis providedby Gronau(1986).
3. These studies, as well as the present study, are variationsof Gary Becker's (1965 and
1976, Chapter7) model of consumerbehaviorbased on a householdproductionfunction
approach.The argumentsin Becker's utility functionare combinationsof goods and time
that are consumedjointly. However, as Gronau(1973, p. 1100)observes, Becker's model
does not deal with home productionin the ordinarysense but in Lancaster's(1966)consumptiontechnology sense.
4. See Gronau(1973)for an earlierattemptto model a two-personhouseholdwith home
production.
488
U = U(ll, 12,X)
Xn = wmI + w2m2 - C
- C2 + R
- U(ll, l2,X) +
-
+ \2(1
12 -
(1 -1
h2-m2-
- h - m - tl)
t2)
(8) Uj-XA= 0
forj = 1, 2, 3 and
9. To do otherwise would require a consideration of the relative location of residence and
place of employment and their impact on utility as well as requiring the estimation of two
travel time equations simultaneously with the six other time-use equations.
10. In a more general analysis in which corner solutions are important, the Khun-Tucker
approach would be needed. Ransom (1987a) has done this when time is divided between
work and non-work, and Wales and Woodland (1983) have done this in the context of a
consumer demand system with binding non-negativity constraints. In the present study,
however, there is nothing to be gained by using the Khun-Tucker framework because our
interest is in the interior solution.
489
490
=0
\3Fi-i
\3Wi
ki = 0
for i = 1, 2 plus the budget and time constraints. Equation (10) implies
wi = xi/X3. Substitution into (9) results in, for i = 1, 2
(11)
Fi = wi
Uj-
X3wj=
0 forj
= 1, 2, 3
wll1 +
212 + X - rr +
1(l -
t2)
tl) + w2(1
- c(t1 + t2) + R
Variable
Wife's Time (i = 2)
?
?
+
-
?
0
0
0
0
0
?
?
+
?
?
?
+
-
?
0
0
0
0
0-
?
?
+
+
?
+
travel times (t1 and t2), the average cost of travel (c) and the fixed costs
of working (C01 and C02) cannot affect the equilibrium values of h, and
h2 or the equilibrium amount of home production, Xh. Moreover, the
traditional theory of the competitive firm implies that ahil/wi < 0 for i =
1, 2 while the sign of ahi/awj is determined by the sign of Fi for i : j =
1, 2. That is, a ceteris paribus increase in the real after-tax wage rate of
person i will lead to a reduction in his(her) home production time and an
increase or decrease in the other person's home production time depending on whether home production times are substitutes or complements in the home production function.
The results in the preceding paragraph are the distinctive refutable
predictions of the two-earner Gronau model. Gronau (1977) argues that
the independence of time spent at home production to nonlabor income
is the main refutable hypothesis, but we have shown that the independence of time spent at home production includes entry cost and travel
times as well. These results do not depend in any way on our abstracting
from the use of market purchased intermediate goods in home production. Even if market purchased intermediate goods enter the home production function, the household's home production decision would still
be separable from its consumption decision. Only the real wage rates and
real prices of the intermediate goods (in terms of the consumption good)
would affect time devoted to home production in equilibrium."1
11. Of course, if home production produces a good that is not substitutable for the market
good, then the decisions would no longer be separable, and changes in R, tl, t2, and c might
affect h, and h2. Likewise, if human capital is affected by the leisure times of the household
491
492
Xh(Wl,
w2)=
F{h(w1,
I = I(w, w2,
,
c,R)
t2,
These functions give the household's demands for leisure times, the demand for goods, and the marginal utility of income at equilibrium. From
X and Xh and the definition of Xm, the household's demand for the composite good from the market is
Xh(w1, w2)
Note that changes in tl, t2, c, and R only affect I and, therefore, only
cause income effects. While an increase in R causes I to increase, an
increase in t1, t2, or c will cause I to decrease. Assuming leisure times
and goods to be normal, it follows that an increase in R leads to increases
in leisure times and market goods while an increase in t1, t2, or c leads
to a decrease in leisure times and market goods.
Since the effects of changes in the real wage rates are completely symmetrical, it is sufficient to examine the effects on the variables when w1
rises alone. Calculating the partial derivatives of leisure times and market
goods with respect to w1, we obtain:
members, then since human capital is a variable in the home production function, the model
would not be separable. See also Kooreman and Kapteyn (1987, page 246).
dl
\ +- aIawl
awl=( \awl/
fori = 1,2
aXm
a-
)
aw1 \aW1
l+ T
ai
=
(24) Aw
(aw)+
(25) axm (
a
(Xm
Awl
(a_
awl.
rTl
+ T, Xm ,+ 7 aXm
l ai
awl a
dXh/aw1
13. Terms one and two in (24) are the substitutionand income effects derived by Ashenfelter and Heckman(1974)in a similarmodel withouthome production.
494
The supply of labor time to the marketby the household may be calculated from the time constraints. The market work supply functions for
i = 1, 2 are:
(26) mi = 1 - li(w1, w2, I) - hi(w1, w2) - ti
am = -
aR
<0
aR
am, -
a/Oil 11
dtm
(28)dl n^
The first term in (28) is the usual income effect. It is positive since aI/at1
< 0. However, the second term arises from the increased time cost of
marketwork and requiresa reductionin that person's marketwork time.
Overall,the effect of the increase in t1on ml is indeterminate.In contrast,
if the spouse's travel time t2 alone changes, then only the demand for
leisure term is affected, and
(29)
=
amt
at2
-_
t >0
ai at2
(31)
m1 a=l1
awi
Owi aWi
We know from (24) that the first term in (31) for i = 1 incorporatesthe
usual substitutionand income effects as well as a profiteffect from home
production.The substitutionand profiteffects are both positive, but the
income effect is negative. The second term in (31) for i = 1 is the result
of changingthe technique of home productionwhen w1rises. Since ah1/
aw1 < 0, the second term is positive. Overall, the sign of amll/w1 is
indeterminateas usual. The situationin (31) for i = 2 is much the same
as for i = 1 but now the sign of the cross-substitutioneffect depends on
whether the leisure times of the household members are substitutes or
complements. Moreover, the sign of ah1/aw2depends on whether the
home productiontimes are substitutesor complements.The profiteffect
is negative, but the income effect is positive in any case. Overall, the
sign of 0m,/0w2is indeterminate.
496
Mean
HbsLeisure
HbsHome
HbsWork
WfsLeisure
WfsHome
WfsWork
Lambda
HbsWage
HbsWageSqr
WfsWage
65.187
7.253
27.561
64.494
20.854
14.655
1.052
5.132
34.286
3.472
WfsWageSqr
24.576
CrossWage
PreSchool
ChildInc
HbsTravel
HbsTravelSqr
WfsTravel
WfsTravelSqr
HbsWagemultipliedby WfsWage
Dummyvariablefor the presence of a preschoolage child
Children'sweekly income, deflated
Husband'stravel time to work as a percentageof total time
Husband'stravel time squared
Wife's travel time to work as a percentageof total time
Wife's travel time squared
19.155
0.524
11.749
2.325
22.061
0.999
4.309
Variable
497
17. We assume that each family files a joint returnand takes a standarddeduction. The
marginaltax rate is then calculatedas the sum of the federal and state marginalrates for
familiesbelow the 40 percent tax bracketand as the sum minusthe productof the federal
and state marginalrates for families in a 40 percent or higherbracket.The higherincome
families are more likely to itemize and deduct other income taxes in calculatingtaxable
income. Statistics indicate that over 80 percent of families in the 40 percent or higher
marginaltax bracketitemize, andthe percentageis over 90 percentfor familieswith adjusted
gross income over $40,000for 1978.
18. We include an urban-ruraldummyin early runs, but droppedthat variablein orderto
achievethe most parsimoniousspecificationpossiblewhen thatdummymadeno discernible
differencein the parameterestimates.
501
Table 3
Parameter Estimates for the Time-Use Equations (estimated simultaneously by WSUR w
Husband's Time
Variable
Leisure
Home
Work
Leisure
Intercept
60.779*
(1.934)
3.141*
(1.129)
0.565*
(0.272)
-0.0045
(0.0074)
0.734*
(0.268)
-0.0181**
(0.0096)
4.882*
(1.426)
0.903
(1.019)
0.274
(0.192)
-0.0053
(0.0066)
0.092
(0.164)
-0.0077
(0.0064)
34.360*
(2.570)
- 4.064*
(1.713)
-0.838*
(0.351)
0.0099
(0.0110)
-0.826*
(0.320)
0.0258*
(0.0119)
66.329*
(2.090)
0.016
(1.476)
0.518**
(0.275)
-0.0166**
(0.0089)
0.368
(0.241)
-0.0117
(0.0092)
Lambda
HbsWage
HbsWageSqr
WfsWage
WfsWageSqr
CrossWage
PreSchool
ChildInc
HbsTravel
HbsTravelSqr
WfsTravel
WfsTravelSqr
-0.0195
(0.0251)
0.569
(0.894)
0.0044
(0.0102)
-1.212*
(0.206)
0.0177*
(0.0057)
- 1.909*
(0.518)
0.1277**
(0.0660)
0.0131
(0.0171)
0.609
(0.554)
0.0044
(0.0066)
-0.405*
(0.125)
0.0123*
(0.0032)
0.195
(0.320)
0.0148
(0.0423)
0.0064
(0.0318)
-1.178
(1.074)
-0.0088
(0.0126)
1.617*
(0.244)
- 0.0300*
(0.0065)
1.714*
(0.623)
-0.1425**
(0.0813)
Standarderrorsin parentheses.
* Significantat 5 percentlevel.
** Significantat 10 percent level.
0.0001
(0.0245)
-0.322
(0.814)
-0.0031
(0.0099)
- 0.549*
(0.184)
0.0097*
(0.0047)
- 4.702*
(0.475)
0.4301*
(0.0635)
Table 4
WSUR Estimated Mean Partial Derivatives and Elasticities (in parentheses)
Husband's Time (i = 1)
Variable
HbsWage (wl)
WfsWage (w2)
ChildInc (R)
PreSchool (Co)
HbsTravel (tl)
WfsTravel (t2)
Wife's
Leisure
Home
Market
Leisure
0.450*
(0.035)
0.508*
(0.027)
0.0044
(0.0008)
0.569
-1.130*
(-0.040)
-1.654*
(-0.025)
0.264
(0.188)
0.106
(0.051)
0.0044
(0.0071)
0.609
-0.348*
(-0.111)
0.225
(-0.031)
-0.714*
(-0.133)
-0.614*
(-0.077)
0.0088
(0.0038)
-1.178
1.478*
(0.125)
1.429*
(0.052)
0.348*
(0.028)
0.286
(0.015)
-0.0031
(-0.0006)
-0.322
-0.504*
(-0.018)
-3.843*
(-0.059)
(((-
(-
* Significantat 5 percentlevel.
Note: ChildIncis a proxy for nonlaborincome (R), and PreSchool is a proxy for the fixed cost of entry into the
Table 3 shows that all variables are significantin the husband's market
work equation except for the nonlaborincome variableand the variable
for the presence of preschool age children. The signs of the statistically
significantcoefficients are consistent with the model's predictions. The
nonsignificanceof our nonwork income variable is not surprisinggiven
the problemswith its measurement.Moreover, many other studies have
found male labor supply to be invariantto changes in nonworkincome,.
The own wage elasticity of the husband'slabor supply of -0.133 is consistent with other research as summarizedby Pencavel (1986).
The only significantvariables in the wife's marketwork equation are
the presence of childrenand the travel times. The own wage elasticity of
0.026 is not significantand is smaller than estimates reported by some
researchers(see Killingsworthand Heckman, 1986). However, our estimate is in line with the estimates of Nakamura,Nakamura,and Cullen
(1979)who reportestimates ragingbetween -0.313 to 0.299 for married
women in Canada-the negative values hold for women below the age
of 45. In a separate study Nakamuraand Nakamura(1981) report wage
elasticities between -0.390 and 0.204 with positive values occurring
again only for older wives. The summaryprovidedby Killingsworthand
Heckman (Table 2.26, 1986) indicates that smaller and sometimes negative uncompensated own-wage elasticities occur more frequently for
older women and when childrenare present. Since our sample contains
only marriedwomen with workinghusbands where each family has exactly two children, our results are not very different from those from
similarlyrestricted samples. In addition, the small size of our estimated
elasticity for the wife's labor supply may be the result of our taking
account of home production.The conventionalwisdom has always been
that women's home production is a close substitute for market work.
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