A Gift of Time

Daiji Kawaguchi, Jungmin Lee and Daniel Hamermesh

No 6700, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: How would people spend time if confronted by permanent declines in market work? We identify preferences off exogenous cuts in legislated standard hours that raised employers' overtime costs in Japan around 1990 and Korea in the early 2000s. Using time-diaries from before and after these shocks, we estimate the probability that an individual would have been affected by the reform. Reduced-form estimates show that the direct effect on a newly-constrained worker was a substantial reduction in market time, with the free-up time in Japan reallocated to leisure and personal maintenance, while in Korea the results are mixed, showing some impact on household production. Simulations using GMM estimates of a Stone-Geary utility function defined over time use suggest no effect on household production in either country. Estimation of a household model shows only slight evidence that spouses shared the time gift, nor that one spouse's allocation of non-market time changed when the other spouse's market work was permanently and exogenously reduced.

Keywords: freedom from work; household bargaining; household production; time use (search for similar items in EconPapers)
JEL-codes: D13 J22 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2012-07
New Economics Papers: this item is included in nep-lma
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Citations: View citations in EconPapers (21)

Published - published in: Labour Economics, 2013, 24, 205-216

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Journal Article: A gift of time (2013)
Working Paper: A Gift of Time (2012)
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