Time Use during Recessions
Job search and work in the informal sector absorb small fractions of the foregone work hours.
In Time Use during Recessions (NBER Working Paper No. 17259), authors Mark Aguiar, Erik Hurst, and Loukas Karabarbounis investigate what activities occupy household members' time when they are unable to find work as a result of an economic downturn. The researchers find that roughly 30 to 40 percent of the "extra" nonworking hours associated with unemployment go to working in the home, which can include a range of activities, such as cooking and home repair. Nearly the same amount - 30 percent - goes to sleeping longer and to watching television. The remaining time is mostly devoted to other leisure activities.
What about searching for another job? That takes up only about 1 percent of the extra hours, these researchers find. "Job search and work in the informal sector absorb small fractions of the foregone work hours," they conclude.
Although other research has modeled how unemployed people use their extra time, this is the first study to use data from a very large sample of households -- the American Time Use Survey from the Bureau of Labor Statistics -- to determine how they actually allocate their time over the business cycle. One limitation of the data is that it begins in 2003, measuring only one pre-recession and one recession period. That makes it hard to differentiate recession-specific trends from longer-term changes in time use, such as the move toward more leisure which began in the 1960s.
Instead, the authors compare data from states hard hit by the recession with states that experienced a smaller rise in unemployment. That cross-state comparison allows them to discern certain trends that are specific to the recession period. For example: of the hours gained because of less work, some 13 percent went to what the authors call "core home production activities," such as cooking, cleaning, and laundry. About 8 percent was devoted to more shopping, 4 percent to the care of parents or other older adults, and some 7 percent to maintaining and repairing the home. Also, some 6 percent of the foregone work hours were given over to child care.
When unemployed, people actually invest much more time - more than 10 percent more time - in themselves in terms of health care, education, and civic activities. But most of the extra hours go to leisure, such as socializing with friends, watching TV, reading, and going to the movies. Another important change is an increase in hours of sleep. The unemployed use more than 20 percent of their lost work hours on extra sleep.
--Laurent BelsieThe Digest is not copyrighted and may be reproduced freely with appropriate attribution of source.