NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Allocating Household Time: When Does Efficiency Imply Specialization?

Robert A. Pollak

NBER Working Paper No. 19178
Issued in June 2013, Revised in March 2014
NBER Program(s):Labor Studies

When does efficiency in the household imply specialization? For example, if we recognize two sectors, "market" and "household," when does efficiency imply that one spouse specializes in the market and the other in the household? If efficiency did imply specialization, then egalitarian marriages would be inefficient and an equity-efficiency tradeoff inescapable. This paper clarifies the roles that household technology and human capital play in reaching conclusions about specialization.

The critical assumption that leads to the specialization conclusion in Becker's Treatise on the Family is that spouses' time inputs are perfect substitutes in household production. With no further assumptions (other than efficiency and the absence of process preferences) perfect substitutes imply specialization. Although some of Becker's proofs appear to rely on households optimally adjusting spouses' stocks of market and household human capital, the specialization conclusion does not: with perfect substitutes, efficiency implies specialization even when each spouse's stocks of human capital are fixed, regardless of the levels at which they are fixed. Other assumptions about household technology also imply the specialization conclusion. I prove that (again in the absence of process preferences) if the household technology is "additive" and exhibits constant returns to scale, then efficiency implies specialization.

download in pdf format
   (314 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19178

Users who downloaded this paper also downloaded* these:
Pollak w17529 Allocating Time: Individuals' Technologies, Household Technology, Perfect Substitutes, and Specialization
Erb and Harvey w11222 The Tactical and Strategic Value of Commodity Futures
Cutler, Poterba, and Summers w3243 Speculative Dynamics and the Role of Feedback Traders
Brown, Liang, and Weisbenner w11002 Executive Financial Incentives and Payout Policy: Firm Responses to the 2003 Dividend Tax Cut
Hasanhodzic and Kotlikoff w19179 Generational Risk - Is It a Big Deal?: Simulating an 80-Period OLG Model with Aggregate Shocks
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us