UCL Department of Economics


Job Market Paper

"Wages and Family Time Allocation" 


This paper examines how married people's time allocation responds to wages and the gender wage gap. In the US, real wages have grown steadily for married men, but even more for married women, narrowing the gender wage gap by as much as 25% over the last three decades. At the same time, women's labor supply has increased and, while couples spend less time on household work, men's relative burden has increased. I develop a collective life-cycle model for individuals in a household (spouses) who differ in preferences and bargaining power but share a common budget constraint; the model features lack of commitment. Individuals decide collectively about market work, household work, and leisure. Individual wages and the gender wage gap affect the family budget as well as intra-family bargaining power. I estimate gender-specific preferences and the parameters of intra-family bargaining power using data on married and divorced individuals from the PSID. The results suggest that the narrowing gender wage gap improved women's bargaining power in the family resulting in a shift of household work from women to men. The effect of women's improved bargaining power on their market work was small. If the gender wage gap was eliminated altogether, female full-time market work would increase by more than 32% even during the childbearing years; moreover total time into household work would decrease by as much as 21% with the time allocation between spouses becoming relatively more equal.