Family Time Use. Leisure, Home Production, Market Work and Work Related Travel - Solberg y Wong (1992)

The Board of Regents of the University of Wisconsin System
Family Time Use: Leisure, Home Production, Market Work, and Work Related Travel
Author(s): Eric J. Solberg and David C. Wong
Source: The Journal of Human Resources, Vol. 27, No. 3 (Summer, 1992), pp. 485-510
Published by: University of Wisconsin Press
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Family Time Use

Leisure, Home Production, Market
Work, and Work Related Travel
Eric J. Solberg
David C. Wong
ABSTRACT
This study analyzes the two-person, Gronau-type neoclassical

model of the household where time use for each person is divided into three basic activities-market work, home production,
and pure leisure-plus work related travel time. The latter is
treated as predetermined. One contribution of this paper is that
the economics of the Gronau model is made clear and a complete comparative static analysis is provided. A second contribution is that the model is subjected to a rigorous empirical test
using data that permits the division of time into its four primary
components-most data sets do not permit this. Our empirical
results do not accord well with the model's predictions or with
previous findings by Gronau. In addition, our results suggest
that work related travel has an important influence on family
time use.
Eric J. Solberg is a professor of economics and David C. Wongis an associate professor

of economics at CaliforniaState Universityin Fullerton. The authorsthankGregoryM.
Duncanfor helpfuldiscussions on correctingfor selection bias, AndrewGillfor many
helpfulcommentsand suggestions at every step of the analysis, and Joyce Pickersgillfor
calling their attentionto the data used in this study andfor informationabout the distributionof marginaltax rates. The authorsacknowledgebenefitsfrom suggestions made
at theirdepartment'sworkshopandfrom commentsby discussants at an annual meeting
of the WesternEconomicsAssociation. Theyalso thankthe refereesfor useful comments. They take responsibilityfor all errorsthat remain. The data used in this article
can be obtained beginningin December 1992 throughDecember 1995from Eric J. Solberg, Departmentof Economics, CaliforniaState University,Fullerton,CA 92634.
[SubmittedJune 1989;accepted April 1991]
THE JOURNAL
OF HUMAN
RESOURCES
* XXVII * 3

486
The Journal of Human Resources
I. Introduction
Increasingly, studies of labor supply have focused on the
joint allocation of time within the household.1 Moreover, some studies
have identified the allocation of time among leisure, home production,
and market work as important to understanding the labor supply decisions of households.2 An early study along these lines is by Gronau
(1977), while a more recent study is by Graham and Green (1984).3
In his paper, Gronau (1977) constructs a model for a married woman
where the husband's decision is exogenous. Gronau's model is formally
that of one individual who allocates time to leisure, home production and
market work.4 Gronau assumes that home time produces a good that is
a perfect substitute for a composite good that may be purchased on the
market. He tests his model's predictions by using data from the 1972
panel of the Michigan Study of Income Dynamics. He concludes that
there is strong support for his version of the neoclassical time-use model.
In their paper, Graham and Green (1984) extend the Gronau model
to a two wage-earner household and allow for jointness between home
production and leisure. Their focus is on the estimation of the household
consumption technology that consists of a Cobb-Douglas function and a
"jointness" function. They estimate an equation for the home production
time for the wife using data from the Panel Study of Income Dynamics
for 1976 and provide estimates for the value of home production. They
show that their parameter estimates are sensitive to the assumptions and
constraints on the household technology.
Kooreman and Kapteyn (1987) have shown that Graham's and Green's
extension of the Gronau model has the same comparative statics as the
original, but they do not test the predictions of that model. Allowing for
"jointness" between home production and leisure in the manner of Graham and Green leaves the separability between production and consumption in the household intact, and it is the separability property that drives
1. For surveys of research on labor supply, see Pencaval (1986) and Killingsworthand
Heckman(1986). For studies of joint labor supply, see Ashenfelterand Heckman(1974),
Wales and Woodland(1977), and Joll et al. (1983).
2. A survey of models incorporatinghome productionis providedby Gronau(1986).
3. These studies, as well as the present study, are variationsof Gary Becker's (1965 and
1976, Chapter7) model of consumerbehaviorbased on a householdproductionfunction
approach.The argumentsin Becker's utility functionare combinationsof goods and time
that are consumedjointly. However, as Gronau(1973, p. 1100)observes, Becker's model
does not deal with home productionin the ordinarysense but in Lancaster's(1966)consumptiontechnology sense.
4. See Gronau(1973)for an earlierattemptto model a two-personhouseholdwith home
production.

Solberg and Wong 487

the comparativestatics of the Gronaumodel. The basis for the separability propertyin the Gronaumodel is the assumptionthat home produced
goods are perfect substitutesfor market-purchasedgoods. Clearly, Gronau's idea is that the household may purchasegroceries and house cleaning items to be combined with time to produce meals and a clean house
or alternativelypurchase ready-mademeals and a maid's service on the
market. Kooreman and Kapteyn eschew this assumption and return to
the original model of Becker (1965) but without the disaggregationof
goods. They argue that the aggregationof goods is permissiblebecause
of the composite commodity theorem.
In the present paper, we present a formal model of the allocation of
time in the manner of Gronau and derive its comparativestatic predictions in order to test them against recent data on family time use. In the
light of the Kooreman and Kapteyn analysis of the Grahamand Green
model, our test of the Gronaumodel carries over to their model as well.
In our empirical test, we avoid specifying production and utility functions. This seems to be the best procedurebecause of the sensitivity of
the productionparametersto the underlyingassumptionsas reportedby
Grahamand Green. We hope that a rigorous test of the Gronau model
and others like it contributeto the discussion of the appropriatenessof
differentmodels of time allocation in the household when home production is important.
Our analysis centers on the case where both a husbandand a wife are
employed.5We explicitly model the effects of the fixed and time costs of
workinglike Gronau.We also attemptto control for the effect of income
taxation since many studies show that such taxation affects labor force
decisions. Our data set permitstime use to be divided into marketwork,
home production,pure leisure, and work relatedtravel time. This permits
a rigoroustesting of the Gronaumodel.
II. A Model of The Household

Consider a household composed of two labor force particihas a single utility function:6
This
household
pants.
5. We do not treat the cases where only the wife is in the labor force or where both persons
are out of the labor force because of data limitations. We do not report results for the
remaining case where only the husband is in the labor force because the results do not
differ much from those reported in other research. Those results are available upon request.
6. Assumed to be twice continuously differentiable with positive first derivatives and
strictly quasi-concave. Other variables that influence utility such as demographic characteristics are suppressed for simplicity in this theoretical model. Such variables, however, will
be considered in the empirical study.

488

(1)
U = U(ll, 12,X)
where li is the leisure time of person i = 1, 2 and X is a composite good.

The quantity of X consumed by the household consists of a part produced
at home (XI) and a part purchased on the market (Xm)so that X Xh +
X,,. We assume that the composition of X does not affect utility.
Home production occurs in accordance with a technology described
by7
(2) Xh = F(hl, h2)
where hi is the time spent at home production by person i. Other inputs
in production, like human capital, are held constant. For simplicity, we
abstract from the use of market purchased intermediate goods in this
formulation.8
The household maximizes utility subject to its production technology
and its income and time constraints. With the composite good as the
numeraire, let wi be the real after-tax wage rate of person i, and let mi
denote the time spent at market work. Let Ci be the real money cost
associated with market work, and let R be the household's real after-tax
nonlabor income. Then the quantity of the good that may be purchased
on the market is given by
(3)
Xn = wmI + w2m2 - C
- C2 + R
Assume that the cost of working in the market is

(4) Ci,= Coi + cti
where C0i is the fixed cost of working, ti is the time spent commuting to
work for person i, and c is the unit cost of travel. The fixed money costs
of working arise from such things as making use of child day care, while
the time costs of work arise from traveling to and from work which uses
both time and money. We specify the transportation costs as directly
proportional to the travel time with a constant unit travel cost. This was
done because of data limitations that prevent us from measuring c for
individuals. Undoubtedly, a more realistic specification would allow c to
vary across individuals and possibly also with travel time since individuals select different modes of travel that affect both commuting time and
unit cost. We treat travel times as being predetermined in keeping with
7. This production function is twice continuously differentiable with positive first derivatives and is strictly concave.
8. Graham and Green include a market-purchased intermediate good, and they consider
the possibility that the human capital of the household members may be more suited to
market work than to home production. These extensions of the model do not affect its
comparative statics.

Solberg and Wong

the short-run, comparative static nature of this model.9 We shall omit the
fixed cost terms in the theoretical analysis that follows because their
effects are similar to changes in R. However, we include a proxy variable
for the fixed cost of working in the empirical analysis.
The income constraint becomes
(5) X = F(h1, h2) + w 1 + w2m2 - c(t + t2) + R
The total time constraints, with total time normalized to unity, can be
written as
(6) li + hi + mi + ti = 1 for i = 1,2.
The household's decision problem is to select (11,12, X, h1, h2, ml, m2)
0 to maximize utility subject to its income and time constraints. The
leisure time and the home production time of either person may not be
aggregated under the composite commodity theorem. This is because,
even though leisure and home times have the same price, leisure time
appears in the utility function while home time does not and home time
appears in the production function while leisure time does not.
III. Analysis with Both Persons Working

This section analyzes the interior solution.10 The Lagrangian is
(7)
- U(ll, l2,X) +
-
+ \2(1
12 -
(1 -1
h2-m2-
- h - m - tl)
t2)
+ X3[wlmI+ w2m2 - c(tl + t2) + R + F(hl, h2) - X]

where X1, X2, and X3 are Lagrange multipliers. The necessary and sufficient conditions for an interior maximum are:
(8) Uj-XA= 0
forj = 1, 2, 3 and
9. To do otherwise would require a consideration of the relative location of residence and
place of employment and their impact on utility as well as requiring the estimation of two
travel time equations simultaneously with the six other time-use equations.
10. In a more general analysis in which corner solutions are important, the Khun-Tucker
approach would be needed. Ransom (1987a) has done this when time is divided between
work and non-work, and Wales and Woodland (1983) have done this in the context of a
consumer demand system with binding non-negativity constraints. In the present study,
however, there is nothing to be gained by using the Khun-Tucker framework because our
interest is in the interior solution.

489
490

(9)
(10)
=0
\3Fi-i
\3Wi
ki = 0
for i = 1, 2 plus the budget and time constraints. Equation (10) implies
wi = xi/X3. Substitution into (9) results in, for i = 1, 2
(11)
Fi = wi
Equation (11) requires the household to allocate each member's home

production time so that the marginal productivity in home production
equals his or her real after-tax wage rate. Conditions (8) become:
(12)
Uj-
X3wj=
0 forj
= 1, 2, 3
where w3 = 1 for simplicity. Thus the household must consume leisure

and goods up to the point where marginal utilities are proportional to the
market prices (wl, w2, 1). The proportionality is expressed by the marginal
utility of income.
The income and time constraints may be combined into a single constraint:
(13)
wll1 +
212 + X - rr +
1(l -
t2)
tl) + w2(1
- c(t1 + t2) + R
where Xr-F(h1, h2) - wlhl - w2h2 is the profit generated by home

production. The right hand side of (13) defines the full-income of the
household in Becker's (1965) sense.
The equilibrium conditions have a simple interpretation. First, the
household allocates its time to home production such that profit -r from
home production is maximized. This leads to (11). Second, the household
selects its consumption bundle such that its utility is maximized subject
to its full-income constraint where TFis at its maximized level. This leads
to (12). The separability of home production from consumption is the
result of assuming that home production produces a good that is a perfect
substitute for the market good. Since home production is independent of
the consumption decision but the consumption is dependent on the home
production decision, we can examine the decisions sequentially starting
with home production. The resulting comparative statics for the household time uses developed below are summarized in Table 1.
A. Home Production
From (11) and the strict concavity of F, it follows that in equilibrium the
times devoted to home production, h1 and h2, are completely determined
by the wage rates wl and w2. Therefore, changes in nonlabor income (R),

Solberg and Wong

Table 1
Comparative Statics of Time Allocation Gronau Model of the
Two-Earner Family
Husband's Time (i = 1)
Variable
Wife's Time (i = 2)
Leisure Home Market Leisure Home Market
Wife's travel time (t2)
?
?
+
-
Price of travel (c)
Husband's wage (wl)

Wife's wage (w2)
Other income (R)
Fixed entry cost (Co)
Husband's travel time (t1)
?
0
0
0
0
0
?
?
+
?
?
?
+
-
?
0
0
0
0
0-
?
?
+
+
?
+
travel times (t1 and t2), the average cost of travel (c) and the fixed costs
of working (C01 and C02) cannot affect the equilibrium values of h, and
h2 or the equilibrium amount of home production, Xh. Moreover, the
traditional theory of the competitive firm implies that ahil/wi < 0 for i =
1, 2 while the sign of ahi/awj is determined by the sign of Fi for i : j =
1, 2. That is, a ceteris paribus increase in the real after-tax wage rate of
person i will lead to a reduction in his(her) home production time and an
increase or decrease in the other person's home production time depending on whether home production times are substitutes or complements in the home production function.
The results in the preceding paragraph are the distinctive refutable
predictions of the two-earner Gronau model. Gronau (1977) argues that
the independence of time spent at home production to nonlabor income
is the main refutable hypothesis, but we have shown that the independence of time spent at home production includes entry cost and travel
times as well. These results do not depend in any way on our abstracting
from the use of market purchased intermediate goods in home production. Even if market purchased intermediate goods enter the home production function, the household's home production decision would still
be separable from its consumption decision. Only the real wage rates and
real prices of the intermediate goods (in terms of the consumption good)
would affect time devoted to home production in equilibrium."1
11. Of course, if home production produces a good that is not substitutable for the market
good, then the decisions would no longer be separable, and changes in R, tl, t2, and c might
affect h, and h2. Likewise, if human capital is affected by the leisure times of the household

491
492

The solution of (11) may be expressed as hi = hi(wl, w2) for i = 1, 2.
When these home times are substituted into the expression for Tr,the
maximized profit function is:
(14) Tr(wl, w2) = Xh(w1, w2) - w1hl(w1, w2) - w2h2(w1, w2)

where
(15)
Xh(Wl,
w2)=
F{h(w1,
w2), h2(wl, w2)}
B. Consumption of Goods and Leisure

When (14) is substituted into (13), the household's full income becomes
a function of w1, w2, tl, t2, c, and R. We can now analyze the consumption
decision by drawing on the traditional theory of the consumer. By solving
(12) and (13), after substituting for 7r from (14), we have:
= li(wl, w2, I) for i = 1, 2
(16)
(17) X = X(w, w2, I)
(18) X3 = X3(w, w2,I)
where
(19)
I = I(w, w2,
,
c,R)
t2,
These functions give the household's demands for leisure times, the demand for goods, and the marginal utility of income at equilibrium. From
X and Xh and the definition of Xm, the household's demand for the composite good from the market is
(20) Xm = X(w1, w2, I)
Xh(w1, w2)
Note that changes in tl, t2, c, and R only affect I and, therefore, only
cause income effects. While an increase in R causes I to increase, an
increase in t1, t2, or c will cause I to decrease. Assuming leisure times
and goods to be normal, it follows that an increase in R leads to increases
in leisure times and market goods while an increase in t1, t2, or c leads
to a decrease in leisure times and market goods.
Since the effects of changes in the real wage rates are completely symmetrical, it is sufficient to examine the effects on the variables when w1
rises alone. Calculating the partial derivatives of leisure times and market
goods with respect to w1, we obtain:
members, then since human capital is a variable in the home production function, the model
would not be separable. See also Kooreman and Kapteyn (1987, page 246).


(21)
dl
\ +- aIawl
awl=( \awl/
(22) aXm (aX
fori = 1,2
aXm
where the subscripts is used for the income-compensatedeffects.12 From

the definitionof I, we have the following equation:
(23)
a-
)
aw1 \aW1
l+ T
where T-- 1 - tl is the time endowmentminusthe travel time associated

with market work for the first person. Substitutingfor aIIaw, into (21)
and (22) and simplifying,we obtain:
ai
=
(24) Aw
(aw)+
(25) axm (
a
(Xm
Awl
(a_
awl.
al a+ aal fori = 1,2
rTl
+ T, Xm ,+ 7 aXm
l ai
awl a
These are generalized Slutzky-Hicks equations for this model of the

household. The first term in each equation is the usual Slutzky substitution effect, the second term is the usual income effect, and the thirdterm
is the profit effect of home production.13Since goods and leisure are
assumed to be normal,the sign of the profiteffect of home productionin
each equation depends only on aTr/awl.However, by Hotelling's lemma
Oar/dwl= - h < 0, so a rise in w1 will cause the profit effect to be
negative in each equation, ceteris paribus.
In the case of the demandfor the first person's leisure, the substitution
effect is negative. Therefore, the profit effect will reinforce the substitution effect. As usual, the total effect of the increase in w, on 1lis indeterminate since the income effect is positive when 11 is normal. For the
second person's demandfor leisure, the cross-substitutioneffect will be
positive if the leisure times of the household members are substitutes
and will be negative if they are complements. In the case of complements, the profiteffect will reinforcethe cross-substitutioneffect. While
in the case of substitutes, the profit effect will oppose both the cross12. Note that in (22), (aXm/dw1)s= (aX/Iwi)s -
dXh/aw1
and aX/Il = aXm/II.
13. Terms one and two in (24) are the substitutionand income effects derived by Ashenfelter and Heckman(1974)in a similarmodel withouthome production.

494
The Journalof Human Resources

substitutionand the income effects. In either case, the overall effect of
an increase in w1on 12 is indeterminate.
For the demand for the composite good from the market, the crosssubstitutioneffect depends on whether or not the first person's leisure
is a complement or a substitute for the consumptiongood. If they are
complements, then the cross-substitutioneffect will be negative and the
profit effect will support it, but if they are substitutes, then the crosssubstitutioneffect will be positive and the profit effect will oppose it.
In either situation, the total effect of an increase in w1 on X, will be
indeterminate.
C. Market Work
The supply of labor time to the marketby the household may be calculated from the time constraints. The market work supply functions for
i = 1, 2 are:
(26) mi = 1 - li(w1, w2, I) - hi(w1, w2) - ti
Because of symmetry, we analyze only the case i = 1. For a ceteris

paribusincrease in R,
(27)
am = -
aR
<0
aR
because h1 and t1 are independentof R. If travel time t1 changes alone,
am, -
a/Oil 11
dtm
(28)dl n^
The first term in (28) is the usual income effect. It is positive since aI/at1
< 0. However, the second term arises from the increased time cost of
marketwork and requiresa reductionin that person's marketwork time.
Overall,the effect of the increase in t1on ml is indeterminate.In contrast,
if the spouse's travel time t2 alone changes, then only the demand for
leisure term is affected, and
(29)
=
amt
at2
-_
t >0
ai at2
because there is only an income effect that stimulates ml. Similarly, a

change in the unit cost of travel c affects only the demand for leisure
term, and
(30) ac = - aI ac >0


Again, there is only a pure income effect stimulatingthe first person to
supply more markettime.
For changes in the wage rates on ml,
(31)
m1 a=l1
awi
'hi fori= 1,2
Owi aWi
We know from (24) that the first term in (31) for i = 1 incorporatesthe
usual substitutionand income effects as well as a profiteffect from home
production.The substitutionand profiteffects are both positive, but the
income effect is negative. The second term in (31) for i = 1 is the result
of changingthe technique of home productionwhen w1rises. Since ah1/
aw1 < 0, the second term is positive. Overall, the sign of amll/w1 is
indeterminateas usual. The situationin (31) for i = 2 is much the same
as for i = 1 but now the sign of the cross-substitutioneffect depends on
whether the leisure times of the household members are substitutes or
complements. Moreover, the sign of ah1/aw2depends on whether the
home productiontimes are substitutesor complements.The profiteffect
is negative, but the income effect is positive in any case. Overall, the
sign of 0m,/0w2is indeterminate.
IV. The Data and Variable Measurement

We use data from the 1977-78 Family Time Use Survey
(Sinclairand Lewis 1985)because it permits the measurementof all the
variables requiredto estimate the time-use equations of the two-earner
Gronaumodel. The survey containsdetailedinformationon the allocation
of time by households composed of a husband, wife and two children
underthe age of eighteen who were full-timeresidents of the household.
In addition,demographiccharacteristics,household income by category,
children'sincome, adults' wage rates, salaryor self-employmentincome,
usual hours worked, and special circumstances that may have affected
time use were also indicated. All members were identified by age and
gender, but race was not identified.Eleven states were included:California, Connecticut,Louisiana, New York, North Carolina,Oklahoma,Oregon, Texas, Utah, Virginia, and Wisconsin. Urban and ruralareas were
surveyed in each state except for Louisiana, which was solely urban,and
North Carolina,which was solely rural.Data collection was divided into
three seasonal segments and occurred over one full year in each state.
Controlledschedulingof interviews allowed each day of the week to be
equally represented.

496

Time spent in each of several household activities (school, paid work,
unpaid work, leisure) as well as times spent to and from each activity
were recorded in ten-minute intervals for two days. After consistency
checks, the number of family records was reduced to 2,040 from 2,100.'4
Time use in various activities was recorded in ten-minute increments for
two days. We attempt to allow for the possible nonequilibrium nature of
the observations by averaging the time-use variables over the two days
thereby reducing the number of observations in half.15 Further, we only
use observations where both spouses are employed. This produced 628
observations for the estimation of the time-use equations. The definitions
and means of the variables used are reported in Table 2.
Market work includes only paid working time. Home production includes only activities that have market substitutes like food preparation,
housecleaning, shopping, maintenance of home, yard, car and pets, care
and construction of clothing and linens, physical care of children, and
home management. Leisure consists of those activities that do not have
market substitutes such as eating, personal care of self, nonphysical care
of children, social recreation activities, school work, and unpaid work.
This definition of leisure is consistent with that of Gronau (1977, p. 1104).
Leisure, home production and market work were calculated as percentages of total time minus travel time to market work. This normalization
allows us to estimate the time-use functions simultaneously subject to the
constraint that the proportion of the times devoted to the three choice
variables sum to unity. However, since we measure travel time as a
percentage of total time, bias is introduced in the estimation of the travel
time coefficients. In Section V, we discuss how to correct for this source
of bias.
This survey gives wage rates for hourly paid workers. For salaried and
other workers, wage rates are calculated by dividing their weekly earnings by the actual hours worked or by the usual hours worked when the
person was temporarily not at work. The calculated wage rates can safely
14. Records are omitted if the family ID numbers did not match, if the homemaker is male,
if the ages of the adults are not recorded, or if there is an extraordinary situation, like a
death in the family, that interrupt a family's normal routine.
15. The "pooling" of the data over the two days introduces the possibility of fixed effects,
but the short time span makes it unlikely that any relevant parameters could be estimated
because of the lack of variation in the explanatory variables between the two periods. We
previously estimated the time-use equations using each day as a separate observation, but
there were few differences between the coefficient estimates. The averaging did, however,
increase the standard errors slightly. So the use of the pooled observations make it harder
to find statistically significant coefficients. We are grateful to one of the referees for suggesting that we average the data over the two days to iron out non-equilibrium effects in
the data.

Solberg and Wong

Table 2
Definitions of Variables Used in Time-Use Analysis
Definition
Mean
HbsLeisure
HbsHome
HbsWork
WfsLeisure
WfsHome
WfsWork
Lambda
HbsWage
HbsWageSqr
WfsWage
Husband'sleisure time as a percentageof discretionarytime

Husband'shome time as a percentageof discretionarytime
Husband'swork time as a percentageof discretionarytime
Wife's leisure time as a percentageof discretionarytime
Wife's home time as a percentageof discretionarytime
Wife's work time as a percentageof discretionarytime
Inverse of Mill's ratio createdfrom Probitestimation
Husband'safter-taxwage rate (hourly),deflated
Husband'swage rate squared
Wife's after-taxwage rate (hourly),deflated
65.187
7.253
27.561
64.494
20.854
14.655
1.052
5.132
34.286
3.472
WfsWageSqr
Wife's wage rate squared
24.576
CrossWage
PreSchool
ChildInc
HbsTravel
HbsTravelSqr
WfsTravel
WfsTravelSqr
HbsWagemultipliedby WfsWage
Dummyvariablefor the presence of a preschoolage child
Children'sweekly income, deflated
Husband'stravel time to work as a percentageof total time
Husband'stravel time squared
Wife's travel time to work as a percentageof total time
Wife's travel time squared
19.155
0.524
11.749
2.325
22.061
0.999
4.309
Variable
be assumed to be independent of the time use measures because they are

not dependent on the reported time worked per week. In fact, the time
use measures are calculated from a diary kept over a two day period for
each family. Because of the short period of time involved, there is no
reason to believe that the wage rate is affected by these short-run time
uses. Since there is no necessary dependence between the time uses and
the measured wage rates, we assumed that the wage rates are uncorrelated with the error terms in the time-use equations.
An attempt to create a nonlabor income variable from the household
income categories (ranges) reported in the survey was abandoned because the ranges were broad and uneven, the distribution was skewed in
an unknown way, and the calculated variable is frequently negative.
Since our estimation strategy required a parsimonious specification, we
decided against including a dummy variable for each of the several income categories. Instead, we use the only nonlabor income variable available, the total weekly income of children in each family. While this proxy
variable is not completely satisfactory, there is no alternative in this data
set. Children are treated as exogenous in the model and their weekly
income may be viewed as nonlabor income in the decision making of
the household. Since the source of nonlabor income is irrelevant to the

497
498 The Journalof HumanResources

household's decisions, variations in weekly children's income may be
used to reflect variationsin household nonlaborincome.
Variationin the price of the composite good by geographic location
mandatesthat we work in real terms. However, traditionalprice indexes
for the geographicallocations of this sampleare unavailable.We attempt
to overcome this problem by creating a price index from data on the
median gross rent paid in occupied housing units in 1980 and using this
as a price index to deflate all nominalvariables.16Federal and state marginal tax rates were assigned using 1978 tax schedules given the family
income category and state of residence.17 Whileit is not feasible to assign
a unit cost of travel time, it is reasonableto suppose that the unit cost of
travel time is constant over the two day period of the sample. Finally, a
dummyvariablefor the presence of a preschool age child is included as
a crude proxy for the fixed cost of working in the market. Thus, the
variablesare chosen to conformclosely to those indicatedby the theoretical model. Many taste-shifter variables included in other labor supply
studies were inappropriatefor this fairly homogeneous sample.18
V. Estimating Equations and Estimation Strategy

There are six equations to be estimated simultaneously.
Since our interest is not specificallyin the parametersof the household's
16. Traditionalprice indexes cannot be matchedwith families here because the ruraland
the urbanlocations are not always associatedwith an SMSA. The urbansites are matched
exactly, but for the ruralsites all that is knownis the county of residence.Thus, when the
sampleinformationpermits,the meanof the mediangross rentreportedfor all cities having
populationsless than twenty thousandin the identifiedcounty is computedand used in
calculatingthe index. Otherwise,the mediangross rent for the whole state is used for the
rurallocations. The rural location in Californiais chosen to normalizethe rents and to
createthe pricedeflator.Thereis no reasona priorito believe thatthis methodis any worse
thanusinga moretraditionalpriceindex with all its associatedproblems.Moreover,housing
is a majorcomponentof the typicalhouseholdbudget.Data on mediangross rent are drawn
from the County and City Data Book 1983, 10th Edition.
17. We assume that each family files a joint returnand takes a standarddeduction. The
marginaltax rate is then calculatedas the sum of the federal and state marginalrates for
familiesbelow the 40 percent tax bracketand as the sum minusthe productof the federal
and state marginalrates for families in a 40 percent or higherbracket.The higherincome
families are more likely to itemize and deduct other income taxes in calculatingtaxable
income. Statistics indicate that over 80 percent of families in the 40 percent or higher
marginaltax bracketitemize, andthe percentageis over 90 percentfor familieswith adjusted
gross income over $40,000for 1978.
18. We include an urban-ruraldummyin early runs, but droppedthat variablein orderto
achievethe most parsimoniousspecificationpossiblewhen thatdummymadeno discernible
differencein the parameterestimates.


preferencestructureand productionfunction, and since the functions are
twice continuouslydifferentiable,the time use functions can be approximated near equilibriumby quadraticfunctions. This approachallows full
flexibilityin the forms of the underlyingutility and productionfunctions
because Taylor's Theorem permits the approximationof any twice continuously differentiablefunction up to the second order by a quadratic
function.19In the estimation,nonlaborincome is enteredlinearlybecause
it was equal to zero for many observations. Likewise, the proxy for the
fixed cost of entry was entered linearly because it is a dummy variable.
Travel time variables are carried in the estimated equations up to the
quadraticterm to reduce the bias introducedby their normalizationin
termsof total time instead of discretionarytime.20The real after-taxwage
rates are entered in accordance with the full quadraticspecification.
We use Heckman's technique to correct for the specification error
caused by sample censoring.21A reduced form Probit equation is estimatedfrom the complete originalsample using maximumlikelihood. The
dependent variable measured whether there is an observable wage rate
for both the husband and the wife. Since the Probit equation is needed
primarilyto create the inverse of Mill's ratio to be used in the time use
equations, parameter estimates for the Probit equations are not reported.22Heckman's technique requiresa correctionfor heteroscedastic
19. Even if we attemptto representthe functionsby reasonablyflexibleforms, we would
have to confront the problem of solving a system of highly nonlinearequations simultaneously, and that would requireadditionalapproximationsthat may not be better than the
quadraticapproximations.See, for instance, Kooreman and Kapteyn (1987) for a time
allocationmodel that derives share equationsfrom a translogutilityfunction.They experience severalproblemsin this application.See also WalesandWoodland(1977)for a simultaneous specificationof the utility and productionfunctionsand a subsequentapproximation
that allows them to utilize Roy's identity in the derivationof their estimatingequations.
We also rejectthe possible use of models displayingadditivepreferences(the Stone-Geary)
because Blundelland Meghir(1986)concludethat moregeneralmodels are "better" based
on a set of statisticalcriteriaincludingtests for nonnormality,heteroscedasticity,nonlinearity, and exogeneity. In ourjudgment,when an alternativestrategyis feasible, the translog
and Stone-Gearytype of utilityfunctionsare too restrictivein that they force certainresults
that shouldbe tested.
20. Since ti/Ti = ti/(1 - ti), the term tilTi is approximated to the first order by ti + t2 where
ti is the travel time and Tiis the discretionarytime of person i.

21. Selection models can be estimatedby numericalmaximumlikelihoodif one is willing
to specify the utility function and an error distribution.See Wales and Woodland(1983)
and Ransom(1987b)for an example where quadraticutility functionsare used as flexible
functionalforms. Whilethe applicationof maximumlikelihoodin the presentcase is theoretically possible, it is impracticalbecause of the complicationsadded by having three time
uses for each of two people and a family productionfunction.
22. From the full validatedsample, 30.93 percent has observablewage rates for both persons yielding a log-likelihoodvalue of -1177.870 and a chi-squaredof 179.945 with 32

500 The Journalof Human Resources

error terms in the time-use equations by applying appropriateweights
to the equations. Since the weights are equation dependent, Zellner's
SeeminglyUnrelatedRegression (SUR) techniquewas appliedto exploit
possible gains in efficiency when the errors among different equations
are correlated.23Therefore, we refer to the estimation procedure as a
weighted SUR (WSUR) procedure. The estimated equations are presented in Table 3, and mean partial derivatives and elasticities are reported in Table 4.24
VI. Time Use Estimates when Both Husband

and Wife Work
The time-use equations are estimated subject to the linear
restrictionsthat total time for each person equals 100 percent and that
the sum of partialeffects of changes in each explanatoryvariable(except
for the weights and Lambda)equals zero for each person's set of time-use
equations. A total F-test on the linear restrictions considered simultaneously yields Fr(24, oo)= 2.216. Thus, a null hypothesis that the restrictions hold is rejected at the 1 percentlevel of significance.The coefficient
estimates differ little between the two models; nevertheless, we choose
to report the restricted estimates because of the logical applicabilityof
the restrictions.
degrees of freedom. The parameterestimates of the reduced form Probit equation are
availablefrom the authorson request.
23. Stelcner and Breslaw (1985) use a similartechniquein applyingGLS to a selectivity
correctedmodel in their study of the labor supply of marriedwomen.
24. A referee suggestedthat the coefficientestimatesmightbe sensitive to the inclusionof
the inverseMills-ratio.Indeed,whenwe estimatethe time-useequationsexcludingLambda,
there are some differences.In the husband'sequationsthe estimatedown-wageelasticities
for leisure and marketwork are larger in magnitudewhile the correspondingcross-wage
elasticities are smaller in magnitude.Also in the husband'sequationsthere is a smaller
response to changes in the wife's travel time. There are no appreciabledifferencesin the
other elasticities for husbands. The wife's estimated own-wage elasticities are larger in
magnitudein the work equation. The effect of the husband'swage on the wife's market
work is smallerin magnitude.The response to changes in travel times was slightlylarger
in the wife's equations. Overall, the differences in coefficient estimates and elasticities
betweenthe two cases lead us to concludethatit is importantto do the selectioncorrection.
These estimates are availableon request.
Regardingconcernsas to whetheror not estimatesare sensitiveto the methodof selection
correction,Mroz (1985, 1987)and Newey, Powell, and Walker(1990)indicatethat parameter estimates are not very sensitive to the method. Rather, it is the specificationof the
equationto be estimatedthat is likely to cause differencesin parameterestimates. This is
anotherreason why we choose to estimate quadraticspecifications.

Solberg and Wong

A. Participation and Time Allocation
The selection variable is significant in the husband's work equation as
well as in the wife's home and work equations. According to the estimates
in Table 3, changes in the unobserved variables that cause an increase in
the probability that the wife participates in the labor market will lead to
an increase in her leisure and home production times and a decrease in
her market labor supply. The fact that changes in the variables affecting
participation such as fixed costs of entry into the labor market may have
opposite effects on labor supply and participation has been noted by
Cogan (1980) and Hanoch (1980). In the presence of either money or time
costs of working in the market, there is a discontinuity in the labor supply
function at the reservation wage. An increase in either type of cost raises
the reservation wage and reduces the probability of participation. However, while an increase in money costs of working increases labor supply
conditional on participation, an increase in time costs of working may
reduce labor supply conditional on participation. Our inability to measure
and control for variations in the price of travel may be relevant here. If
the price of travel decreases, then the probability of participation will
tend to increase, but time spent working will tend to decrease given
participation.25
B. Home Production
We have shown that the main refutable predictions of the two-earner
Gronau model concern home production times. Our estimates in Table 3
indicate that the husband's home production time is significantly affected
only by his own travel time. The theoretical model predicts that the husband's home production time is independent of changes in fixed cost and
travel time, but our estimates indicate that the husband increases his
home production time when there is an increase in the fixed cost of
working and decreases his home production time when there is an increase in his travel time.
Our results also indicate that the wife's home production time is significantly affected by the variable for the fixed cost of working arising
from the presence of preschool age children in the household, her own
travel time, and her wage rate. The significant impacts of changes in the
25. Heckman (1980) assumes that hours of work is proportional to the gap between the
actual wage and the reservation wage and that the proportionality factor is positive. Thus,
he assumes a positively sloped labor supply curve, and it makes sense in that case that
the effect of the selection rule would be positive on hours of work. We make no such
assumption.

501
Table 3
Parameter Estimates for the Time-Use Equations (estimated simultaneously by WSUR w
Husband's Time
Variable
Leisure
Home
Work
Leisure
Intercept
60.779*
(1.934)
3.141*
(1.129)
0.565*
(0.272)
-0.0045
(0.0074)
0.734*
(0.268)
-0.0181**
(0.0096)
4.882*
(1.426)
0.903
(1.019)
0.274
(0.192)
-0.0053
(0.0066)
0.092
(0.164)
-0.0077
(0.0064)
34.360*
(2.570)
- 4.064*
(1.713)
-0.838*
(0.351)
0.0099
(0.0110)
-0.826*
(0.320)
0.0258*
(0.0119)
66.329*
(2.090)
0.016
(1.476)
0.518**
(0.275)
-0.0166**
(0.0089)
0.368
(0.241)
-0.0117
(0.0092)
Lambda
HbsWage
HbsWageSqr
WfsWage
WfsWageSqr

CrossWage
PreSchool
ChildInc
HbsTravel
HbsTravelSqr
WfsTravel
WfsTravelSqr
-0.0195
(0.0251)
0.569
(0.894)
0.0044
(0.0102)
-1.212*
(0.206)
0.0177*
(0.0057)
- 1.909*
(0.518)
0.1277**
(0.0660)
0.0131
(0.0171)
0.609
(0.554)
0.0044
(0.0066)
-0.405*
(0.125)
0.0123*
(0.0032)
0.195
(0.320)
0.0148
(0.0423)
0.0064
(0.0318)
-1.178
(1.074)
-0.0088
(0.0126)
1.617*
(0.244)
- 0.0300*
(0.0065)
1.714*
(0.623)
-0.1425**
(0.0813)
Standarderrorsin parentheses.
* Significantat 5 percentlevel.
** Significantat 10 percent level.

0.0001
(0.0245)
-0.322
(0.814)
-0.0031
(0.0099)
- 0.549*
(0.184)
0.0097*
(0.0047)
- 4.702*
(0.475)
0.4301*
(0.0635)
Table 4
WSUR Estimated Mean Partial Derivatives and Elasticities (in parentheses)
Husband's Time (i = 1)
Variable
HbsWage (wl)
WfsWage (w2)
ChildInc (R)
PreSchool (Co)
HbsTravel (tl)
WfsTravel (t2)
Wife's
Leisure
Home
Market
Leisure
0.450*
(0.035)
0.508*
(0.027)
0.0044
(0.0008)
0.569
-1.130*
(-0.040)
-1.654*
(-0.025)
0.264
(0.188)
0.106
(0.051)
0.0044
(0.0071)
0.609
-0.348*
(-0.111)
0.225
(-0.031)
-0.714*
(-0.133)
-0.614*
(-0.077)
0.0088
(0.0038)
-1.178
1.478*
(0.125)
1.429*
(0.052)
0.348*
(0.028)
0.286
(0.015)
-0.0031
(-0.0006)
-0.322
-0.504*
(-0.018)
-3.843*
(-0.059)
(((-
(-
* Significantat 5 percentlevel.
Note: ChildIncis a proxy for nonlaborincome (R), and PreSchool is a proxy for the fixed cost of entry into the


fixed cost and travel time variablesare contraryto the predictionsof the
two-earnerGronaumodel. However, unlikethe situationfor the husband,
a change in her own wage rate leads the wife to reduce her home production time as required by the model. The fact that the husband's home
time does not fall when his wage rate rises as the model requires is also
noted by Kooremanand Kapteyn (1987, page 243).
Our results on the behavior of home productionmay be compared to
the findings of Gronau (1977) who presented results only for women.
Gronau's wage rate is derived by regressing the log of the before tax
wage rate on education, experience and the husband's wage rate. Moreover, his dependentvariableis the numberof hours per year spent in the
three time activities, and his work time variableincludes travel to work.
He does not include travel time as an explanatoryvariable because of
datalimitations.In addition,Gronaudoes not attemptto correctfor selectivity bias, though he recognized the problem. Gronau concludes from
his empiricalanalysis, that when a marriedwoman works in the market,
an increase in her wage leads to a reductionin her home productiontime
while an increase in her husband's wage or in nonlabor income has no
effect on her home production. Our more complete theoretical analysis
of Gronau's model shows that an increase in the husband's wage will
affect the home productiontime of the wife. Therefore, the zero impact
of the husband's wage on the wife's home productionfound by Gronau
is not a necessary consequence of the complete model, ratherit is a result
of his treatingthe husbandexogenously. It should thereforenot be taken
as support for that model. Our estimates also show that an increase in
the husband's wage rate has an insignificantimpact on the wife's home
productiontime. Whatis not permittedby the model is the fact that travel
time, which affects the household's leisure like the nonlaborincome variable, turns out to have a significantimpact on the home productiontimes
of the household members.
C. Leisure
Table 3 shows that the husband's leisure is significantlyaffected by the

travel time variables and the real wage rates, but the nonlabor income
variable and the variable for the fixed cost of working arising from the
presence of preschool age childrenare not statisticallysignificant.As the
model predicts, the signs of the effects of travel times on the husband's
leisure are both negative. The signs of the changes in the wage rates may
also be taken as consistent with the model since it is inconclusive on
these effects. The wife's leisure is significantlyaffected by the husband's
wage and by the travel time variables, and the signs of all the significant
coefficients conform to the model's predictions. Her own wage rate has


a positive, but nonsignificanteffect on her leisure. Overall, the results
indicate that each person's leisure increases with an increase in either
wage, but that the husband'sresponse is significantand greaterthan the
wife's response.
In his study, Gronau found that marriedwomen who work decrease
their demandfor leisure as their wage increases. Our result on this score
while insignificantis opposite to Gronau's finding. This difference may
be the result of our treatingboth the husband'sand the wife's time allocations simultaneouslywhile Gronau treats only the wife's allocation of
time takingthe husband's time allocation as given. Moreover, Gronau's
exclusion of travel to work as an explanatoryvariable, which we have
seen is of significancein time allocation, may have biased his result.
D. Market Work
Table 3 shows that all variables are significantin the husband's market
work equation except for the nonlaborincome variableand the variable
for the presence of preschool age children. The signs of the statistically
significantcoefficients are consistent with the model's predictions. The
nonsignificanceof our nonwork income variable is not surprisinggiven
the problemswith its measurement.Moreover, many other studies have
found male labor supply to be invariantto changes in nonworkincome,.
The own wage elasticity of the husband'slabor supply of -0.133 is consistent with other research as summarizedby Pencavel (1986).
The only significantvariables in the wife's marketwork equation are
the presence of childrenand the travel times. The own wage elasticity of
0.026 is not significantand is smaller than estimates reported by some
researchers(see Killingsworthand Heckman, 1986). However, our estimate is in line with the estimates of Nakamura,Nakamura,and Cullen
(1979)who reportestimates ragingbetween -0.313 to 0.299 for married
women in Canada-the negative values hold for women below the age
of 45. In a separate study Nakamuraand Nakamura(1981) report wage
elasticities between -0.390 and 0.204 with positive values occurring
again only for older wives. The summaryprovidedby Killingsworthand
Heckman (Table 2.26, 1986) indicates that smaller and sometimes negative uncompensated own-wage elasticities occur more frequently for
older women and when childrenare present. Since our sample contains
only marriedwomen with workinghusbands where each family has exactly two children, our results are not very different from those from
similarlyrestricted samples. In addition, the small size of our estimated
elasticity for the wife's labor supply may be the result of our taking
account of home production.The conventionalwisdom has always been
that women's home production is a close substitute for market work.


Ourresults indicatethat marriedwomen reduce home productiontime in
response to a higher wage rate as expected, but the substitutiontoward
marketwork is quite smallwhile leisure time increases. At the same time,
our analysis of the selection rule indicates that workingwives do tend to
substitute home production and leisure for market work, but that the
substitution occurs primarilythrough the participationdecision. Most
previous studies ignore home production, and that could bias their estimates.
For the most part, the signs of the coefficients of the significantvariables in the wife's labor supply equationsshown in Table 3 are in keeping
with the model. An exception is the fixed cost of working that has a
significantnegative effect. Gronau (1977) obtains a similar result. He
appears to think that it is consistent with his model, but this cannot be
the case because an increase in any componentof the fixed cost of working should lead to an increase in marketwork.
VII. Summary and Conclusions

Our goal in this paper was to provide a systematic derivation of the predictionsof the model of time allocation suggested, but not
fully and formally derived, by Gronau (1977) or by Grahamand Green
(1984) and to test the extended and formalized model against data on
householdtime use for the two-earnerfamily. Consistentwith the original
Gronaumodel, we concentratedon the joint allocationof time to leisure,
to home productionand to marketwork when both husbandand wife are
labor force participants.Moreover, we included both the fixed and time
costs of working, as did the originalGronaumodel, in our formalization
and empiricaltest of the two-earnerGronaumodel.
The time-use equations were estimated using quadraticspecifications
that are consistent with any functional form for underlyingutility and
productionfunctions. This approachpermitsthe estimationprocedureto
determine the signs of the coefficients without forcing results by using
specificfunctionalforms for either of the functions. The data set used for
estimation, though flawed in several ways, permittedthe measurement
of the critical variables requiredby the Gronau model. Time use is divided into pure leisure, home productionand marketwork, and the data
permittedthe measurementand use of travel time to work, a variable
frequentlyomitted in prior research. We have shown that travel time as
a real cost of workingis a significantexplanatoryvariablein the time use
decisions of both the husbandand the wife.
Two aspects of our empirical results are worth special notice. First,
the proxy for nonlabor income, children's income, is not statistically


significantin any of the equations. While other reported research has
experienced similarresults, we were fortunatethat other included variables in our estimated equations, such as the fixed cost of working and
the travel times of the couples also have only income effects and, accordingto the model, should not affect home productiontimes. Thus, the
absence of a good measure for nonlaborincome should not be taken as
a serious drawback in our attempt to validate the model. Second, we
wish to stress the fact that in all the time use equations at least one
person's travel time variableis significant.Our study thereforeprovides
supportfor includingtravel time as an explanatoryvariable.Omissionof
travel time, as is common in other research, is likely to cause an omitted
variablebias.
When both spouses are participatingin the labor force, we found that
the criticalpredictionsof the Gronaumodel, and of others like it such as
Grahamand Green (1984), about the effect on time devoted to home
productionwas mainly contradictedby the data. After due consideration
is given to possible sources of bias, we believe that the failure of the
Gronaumodel to pass the test indicates that the particularway in which
home productionis incorporatedin the model cannot be justified when
both spouses work in the market.Perhapsthe basic reason for the failure
of the model is the assumptionthat the home producedgood is a perfect
substitute for the market-purchasedgood. In an earlier work, Gronau
(1973)attemptedto develop a version of his model in which outputfrom
home productionis includedin the household's utilityfunctionas a separate argument.He later rejected that formulationbecause it had "only
limitedpredictivepower." (Gronau1977,page 1105, note 3.) In the light
of our analysis, however, it appearsthat the later variantof the Gronau
model does not stand up well to careful empiricalexamination.
Future research might test this model furtherby applyinga different
data set which permits the inclusion of the price of travel along with
travel time. Also, an extension of the model that endogenizedtravel time
might lead to a complete set of comparativestatic predictions, and the
empiricalestimates might be improved by endogenizingother explanatory variablesas well. Also, to the extent that humancapitalis influenced
by leisure throughits effect on physical and mentalhealth, home production would become a function of lump-sumchanges in income as well as
the costs of travel time, but few refutablepredictionswould be derivable
from such a model. In any case, such considerationslead to dynamic
models beyond our present analysis. In the meantime,a morefruitfulline
of inquirymay be to explore alternativehousehold decision models that
permitbargainingand, perhaps, strategicdecision makingalong the lines
being pursuedby McElroy (1990)and Kooremanand Kapteyn (1990).

Solberg and Wong
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Family Time Use. Leisure, Home Production, Market Work and Work Related Travel - Solberg y Wong (1992)

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Family Time Use. Leisure, Home Production, Market Work and Work Related Travel - Solberg y Wong (1992)

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The Board of Regents of the University of Wisconsin System

This content downloaded from 201.213.38.62 on Thu, 12 Sep 2013 15:57:13 PM

Family Time Use

This study analyzes the two-person, Gronau-type neoclassical

Eric J. Solberg is a professor of economics and David C. Wongis an associate professor

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The Journal of Human Resources

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Solberg and Wong 487

II. A Model of The Household

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The Journal of Human Resources

where li is the leisure time of person i = 1, 2 and X is a composite good.

Assume that the cost of working in the market is

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Solberg and Wong

III. Analysis with Both Persons Working

+ X3[wlmI+ w2m2 - c(tl + t2) + R + F(hl, h2) - X]

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The Journal of Human Resources

Equation (11) requires the household to allocate each member's home

where w3 = 1 for simplicity. Thus the household must consume leisure

where Xr-F(h1, h2) - wlhl - w2h2 is the profit generated by home

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Solberg and Wong

Leisure Home Market Leisure Home Market

Wife's travel time (t2)

Price of travel (c)

Husband's wage (wl)

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The Journal of Human Resources

(14) Tr(wl, w2) = Xh(w1, w2) - w1hl(w1, w2) - w2h2(w1, w2)

w2), h2(wl, w2)}

B. Consumption of Goods and Leisure

(20) Xm = X(w1, w2, I)

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Solberg and Wong 493

(22) aXm (aX

where the subscripts is used for the income-compensatedeffects.12 From

where T-- 1 - tl is the time endowmentminusthe travel time associated

al a+ aal fori = 1,2

These are generalized Slutzky-Hicks equations for this model of the

and aX/Il = aXm/II.

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The Journalof Human Resources

Because of symmetry, we analyze only the case i = 1. For a ceteris

because h1 and t1 are independentof R. If travel time t1 changes alone,

because there is only an income effect that stimulates ml. Similarly, a

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Solberg and Wong 495

'hi fori= 1,2

IV. The Data and Variable Measurement

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The Journal of Human Resources

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Solberg and Wong

Husband'sleisure time as a percentageof discretionarytime

Wife's wage rate squared

be assumed to be independent of the time use measures because they are

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498 The Journalof HumanResources

V. Estimating Equations and Estimation Strategy

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