Question

In a particular family, both spouse A and spouse B could earn $20 per hour in market work. Both of them enjoy cooking and taking care of their children and agree on an egalitarian division of house chores. However, spouse A has a comparative advantage in the production of home-produced goods. Based on Gary Becker’s model of time allocation, how does this family make a decision regarding their use of time?

Answer 1

In this family, both spouse A and spouse B could earn $20 per hour in the labour market.

However, spouse A has a comparative advantage in the production of home-produced goods.

Based on Gary Becker’s model of time allocation, time usage is defined in three categories, labor market time (time taken in generation of income for acquiring labour market goods and services), household production time (time taken in meals production) and consumption of time (time taken in consuming meals).

Therefore, based on the above model, a family must divide their time according to their areas of comparative advantage. Thus, in this case spouse A has a comparative advantage in the production of home-produced goods, so he must use his time in household production of goods. And Spouse B who is not having comparative advantage in household production of goods, must use his time in the labor market. In this way both the spouses can use their time according to their expertise and gain utility for the whole household in a much better way, by using their comaparative advantages in their favour.