A Theory of Allocation of Time in Markets for Labour and Marriage

Abstract

This article was published 25 years ago and written mostly while I was a fellow at the Center for Advanced Study in the Behavioral Sciences at Stanford, in 1980-81. I used my middle name Amyra, my last name was hyphenated, I had just completed my dissertation under the supervision of Gary Becker and was not yet naturalized as a citizen of the USA. My English writing skills were lacking. I was impatient, packed too many ideas into one article, and was not careful enough in stating all my model's assumptions. Had this article been more readable, the differences between my marriage model and Becker's would have been more obvious, and so would be parallels with more recent models of marriage. These notes are aimed at filling the gaps that I left open in the early 1980s. This article was reproduced in my 1993 book with very few changes (GS93). INSTRUCTIONS TO READERS: These notes need to be used in juxtaposition to the original article, for most equations and all graphs are omitted here. In the text below the original GS84 article is reproduced in Times Roman, while explanations, qualifications and notes are in Courier. They address the shadowed statements in the previous paragraph reproduced from GS84. Text in squared brackets has been added to original article. The original article [henceforth, the article] follows British spelling, whereas the additions use US spelling. Most footnotes found in the original article are ignored here. p. 863 Economists have long recognised that the nature of the household plays a role in determining the supply of factors of production and the demand for goods and services. However, it was not until the 'new home economics' developed by Mincer (1962)) Becker (1965) and Lancaster (1966) that household structure was given a significant role in economic theory. Today labour economists regularly write about the value of married women's time, and marital status enters economic analyses of consumption. However, no allowance has been made for potential changes in the character of the household: single persons don't marry and married couples do not divorce. In each case the contact of the couple or the individual with the outside world is limited to exchange in goods, factor or asset markets. We have no theory analysing the interdependence between labour and marriage markets. This universally accepted assumption of a predetermined marital status is puzzling in the light of more than a decade of contributions to the economics of marriage, e.g.

Self-employment, earnings, and sexual orientation

“…The first hypothesis, from Grossbard-Shechtman (1984) and Grossbard and Jepsen (2008), is that individuals within a couple pool resources in the form of a quasi-wage transfer. 10 Aldén et al (2015) find suggestive evidence that gay men pool resources after partnership.…”

“…Grossbard-Shechtman (1984) models one member of a partnership as transferring access to earnings to the partner who performs more household services thorough a Quasi Wage Transfer. Grossbard and Jepsen (2008) apply bargaining theory to same-sex couples, suggesting that Quasi Wage Transfers are less essential to lesbians than gay men when forming couples, which may explain some of the earnings differences across couple types.…”

Collective consumption models with restricted bargaining weights: an empirical assessment based on experimental data

“…In this respect, one may also analyze alternative (non-consensual) group consumption models that account for independent individual decision making (see, for example, Grossbard-Shechtman 1984Grossbard 2010). This would allow one to assess (and compare) the empirical performance of different models proposed in the literature on 'New Home Economics'.…”

An empirical analysis of the time allocation of Italian couples: are they responsive?

“…The 'New home economics' (see Mincer (1962) for initial developments in this area, and Apps and Rees (2009) for a review of the international literature, both theoretical and empirical) recognized the importance of the structure of the household in the decisions of household members, and emphasizes that spouses' decisions are taken simultaneously. Further developments in this area include Grossbard-Schechtman (1984), addressing time allocation decisions within households, incorporating the role of household structure and marriage, while allowing household members to have their own individual preferences. 2 In this paper the interactions between spousal decisions will be incorporated in estimating the time allocation model.…”