How Does Household Production Affect Earnings Inequality? Evidence from the American Time Use Survey

Levy Economics Institute Working Paper No. 454

31 Pages Posted: 15 Jun 2006

See all articles by Harley Frazis

Harley Frazis

U.S. Bureau of Labor Statistics

Jay Stewart

Bureau of Labor Statistics; IZA Institute of Labor Economics

Date Written: June 2006

Abstract

Although income inequality has been studied extensively, relatively little attention has been paid to the role of household production. Economic theory predicts that households with less money income will produce more goods at home. Thus extended income, which includes the value of household production, should be more equally distributed than money income. We find this to be true, but not for the reason predicted by theory. Virtually all of the decline in measured inequality, when moving from money income to extended income, is due to the addition of a large constant - the average value of household production - to money income. This result is robust to alternative assumptions that one might make when estimating the value of household production.

Keywords: Inequality, household production, time use

JEL Classification: D31, D13, J22

Suggested Citation

Frazis, Harley and Stewart, Jay, How Does Household Production Affect Earnings Inequality? Evidence from the American Time Use Survey (June 2006). Levy Economics Institute Working Paper No. 454. Available at SSRN: https://ssrn.com/abstract=908592 or http://dx.doi.org/10.2139/ssrn.908592

Harley Frazis (Contact Author)

U.S. Bureau of Labor Statistics ( email )

2 Massachusetts Avenue, NE
DC
United States

Jay Stewart

Bureau of Labor Statistics ( email )

2 Massachusetts Avenue, NE
Washington, DC 20212
United States

IZA Institute of Labor Economics

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

Register to save articles to
your library

Register

Paper statistics

Downloads
59
Abstract Views
653
rank
362,157
PlumX Metrics