In a particular family, both spouse A and spouse B could earn $20 per hour in...

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?

Expert Solution

In a family, both spouses earn the same income per hour in the labor market. However spouse A has a comparative advantage in production of home produced goods.

Now as per Gary Becker's model of time allocation, time can be used in mainly three ways, (i) through labor market time, where income is generated in order to acquire market goods.

(ii) Household production time - Where meals are made

(iii) Through consumption of time. - Meals are consumed

Thus according to his model of time allocation, household members should allocate their time in areas where they have a comparative advantage. Thus as spouse A has a comparative advantage in production of home produced goods, that spouse should allocate time for household production, while the other spouse B who doesn't have a comparative advantage in home-produced goods, should allocate time and work for the labor market.

Cause if spouse B were to give more time for household production, it would reduce utility of the entire household.

Rahul Sunny answered 1 year ago

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In a particular family, both spouse A and spouse B could earn $20 per hour in...

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