American Economic Review: Vol. 102 No. 3 (May 2012)


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Aggregate Impacts of a Gift of Time

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Lee, Jungmin, Daiji Kawaguchi, and Daniel S. Hamermesh. 2012. "Aggregate Impacts of a Gift of Time." American Economic Review, 102(3): 612-16.

DOI: 10.1257/aer.102.3.612


How would people spend additional time if confronted by permanent declines in market work? We examine the impacts of cuts in legislated standard hours which raised employers' overtime costs in Japan around 1990 and in Korea in the early 2000s. Using time-diaries from before and after, we show the shocks were effective -- per-capita hours of market work declined discretely. The economy-wide drops in market work were reallocated solely to leisure and personal maintenance. In the absence of changing household technology a permanent time gift leads to no increase in time spent in household production by the average individual.

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Lee, Jungmin (Sogang U and IZA, Bonn)
Kawaguchi, Daiji (Hitotsubashi U and IZA, Bonn)
Hamermesh, Daniel S. (U TX and Maastricht U)

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J22: Time Allocation and Labor Supply

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