Abstract
What does the existence of WiHo (Work-In-Household) markets imply for the analysis of time allocation and value of time? In line with Chap. 2 the analysis is simplified by assuming just one type of man and one type of woman. Whether individuals work in household production benefiting their spouse (as WiHo-workers) or supply such work (as WiHo-users) will affect their labor supply. Integrating WiHo markets into the analysis of labor supply also influences how income (own and partner’s) affects how much people participate in the labor force, their hours of work, and their occupation. The model also leads to wage effects that differ from standard wage elasticities of labor supply and to a prediction typically overlooked in labor economics: sex ratios in marriage markets will influence labor supply and value of time. Even though the models of Chaps. 2 and 3 were rooted in Gary Becker’s theory of marriage, this chapter and the following ones diverge from Becker’s analyses in that they consider married individuals as separate decision-makers with different vested interests, depending on whether they are WiHo-workers or WiHo-users. An implication of the model for the valuation of time spent in home production (including childcare) is that value of time is not likely to depend much on whether individuals are in the labor force or not, in contrast to Robert Willis’ well-known conclusion that took account of household production but viewed households as integrated units.
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Notes
- 1.
In an email he sent me Becker (2004) uses the term “imputations.”
- 2.
This section is based on my notes from a labor economics class taught by H. Gregg-Lewis at the University of Chicago in 1973–1974.
- 3.
Another early study of sex ratios and women’s labor supply is South and Trent (1988).
- 4.
It is assumed that the influx of men does not affect the aggregate demand for total labor and the level of nonwork income V.
- 5.
It is assumed that the goods and services that men produce with the help of women’s WiHo have a positive income elasticity.
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Grossbard, S. (2015). How Marriage Markets Affect Allocation and Valuation of Time Implications from a Macro Model. In: The Marriage Motive: A Price Theory of Marriage. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-1623-4_4
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