The Time and Timing Costs of Market Work

Daniel Hamermesh and Stephen Donald

No 13127, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: With the American Time Use Survey of 2003 and 2004 we first examine whether additional market work has neutral impacts on the mix of non-market activities. The estimates indicate that fixed time costs of market work alter patterns of non-market activities, reducing leisure time and mostly increasing time devoted to household production. Similar results are found using time-diary data for Australia, Germany and the Netherlands. Direct estimates of the utility derived from goods consumption and two types of non-market time in the presence of these fixed costs indicate that they generate a utility-equivalent of as much as 8 percent of income that must be overcome before market work becomes an optimizing choice. Market work also alters the timing of a fixed amount of non-market activities during the day, away from the schedule chosen when market work imposes no timing constraints. All of these effects are mitigated by higher family income. The results provide a new supply-side explanation for the frequently observed discrete drop from full-time work to complete retirement.

JEL-codes: D13 J22 J26 (search for similar items in EconPapers)
Date: 2007-05
New Economics Papers: this item is included in nep-lab, nep-ltv and nep-upt
Note: AG LS PE
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Citations: View citations in EconPapers (12)

Published as "A Structural Model of the Fixed Time Costs of Market Work" Donald, Stephen G.; Hamermesh, Daniel S.; Economics Letters, September 2009, v. 104, iss. 3, pp. 125-28

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