Wages and Family Time Allocation

Alexandros Theloudis

No 2018-06, LISER Working Paper Series from Luxembourg Institute of Socio-Economic Research (LISER)

Abstract: This paper examines changes in married people's allocation of time since 1980, a period in which female labor supply increased substantially, men's share of household work rose, and the gender wage gap narrowed down. I develop a life-cycle collective household model for market and non-market work, consumption and asset accumulation, which also features lack of commitment to lifetime marriage. Wages in the model shift intra-family bargaining power and induce bargaining effects on outcomes in addition to standard income and substitution effects. I estimate gender-specific preferences and how intra-family bargaining power changes with a narrowing gender gap using data from the PSID. The results suggest that a narrowing gender gap improved women's bargaining power in the family resulting in a shift of household work to their husbands. It also contributed to the increase in female labor market participation. If the gender gap is counterfactually eliminated, the proportion of women in full-time work rises throughout the lifecycle to match approximately that of men. The increase comes from women who cut down household chores and enter the labor market when they previously did not participate.

Keywords: Life-cycle collective model; home production; lack of commitment; gender wage gap; bargaining effects; equal pay; simulated method of moments; PSID (search for similar items in EconPapers)
JEL-codes: D12 D13 D91 J22 (search for similar items in EconPapers)
Pages: 76 pages
Date: 2018-02
New Economics Papers: this item is included in nep-dem, nep-dge, nep-gen, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:irs:cepswp:2018-06

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