Home production technology and time allocation: empirics, theory, and implications

Lei Fang and Guozhong Zhu

No 2012-19, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: We document a set of time use patterns in both time series and cross sections. To explain these facts, we propose and estimate a model of time allocation that emphasizes the role of home production technology. We find it necessary to consider both labor-augmenting technology and total factor productivity in home production. Based on the estimated model, we study the effects of proportional tax and lump-sum transfer on time allocation and labor supply, with the roles of home production technology and wage heterogeneity highlighted.

Date: 2012
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