The Time and Timing Costs of Market Work

43 Pages Posted: 27 Jun 2007 Last revised: 14 Nov 2022

See all articles by Daniel S. Hamermesh

Daniel S. Hamermesh

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

Stephen G. Donald

University of Texas at Austin - Department of Economics

Date Written: May 2007

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.

Suggested Citation

Hamermesh, Daniel S. and Donald, Stephen G., The Time and Timing Costs of Market Work (May 2007). NBER Working Paper No. w13127, Available at SSRN: https://ssrn.com/abstract=988937

Daniel S. Hamermesh (Contact Author)

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

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National Bureau of Economic Research (NBER)

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Stephen G. Donald

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

Austin, TX 78712
United States