Beware of Workaholics: Household Preferences and Individual Equilibrium Utility

Gersbach, Hans; Haller, Hans H.

Beware of Workaholics: Household Preferences and Individual Equilibrium Utility

33 Pages Posted: 26 Feb 2005

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Hans H. Haller

Virginia Polytechnic Institute & State University - Department of Economics

Date Written: February 2005

Abstract

This paper analyzes the effects of sociological changes in the form of a shift of influence within two-member households participating in labor and product markets. The most striking effects occur when household members differ in individual preferences and enjoy positive leisure-dependent externalities. For instance, a global sociological change where the "workaholic" member becomes more influential in each working class household can render the working class worse off. A binding restriction on the number of hours an individual is allowed to work can benefit all workers.

Keywords: household behavior, general equilibrium, externalities, labor supply

JEL Classification: D10, D50, J22

Suggested Citation: Suggested Citation

Gersbach, Hans and Haller, Hans H., Beware of Workaholics: Household Preferences and Individual Equilibrium Utility (February 2005). IZA Discussion Paper No. 1502. Available at SSRN: https://ssrn.com/abstract=673513