A Gift of Time

40 Pages Posted: 21 Jul 2012

See all articles by Daiji Kawaguchi

Daiji Kawaguchi

University of Tokyo - Graduate School of Economics

Jungmin Lee

FIU; IZA Institute of Labor Economics

Daniel S. Hamermesh

University of Texas at Austin - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

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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: time use, household production, freedom from work, household bargaining

JEL Classification: J22, D13

Suggested Citation

Kawaguchi, Daiji and Lee, Jungmin and Hamermesh, Daniel S., A Gift of Time. IZA Discussion Paper No. 6700, Available at SSRN: https://ssrn.com/abstract=2114880

Daiji Kawaguchi (Contact Author)

University of Tokyo - Graduate School of Economics ( email )

Tokyo
Japan

Jungmin Lee

FIU ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Daniel S. Hamermesh

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States
512-475-8526 (Phone)
512-471-3510 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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