THE SHADOW ECONOMY: ILLICIT WORK AND HOUSEHOLD PRODUCTION: A MICROANALYSIS OF WEST GERMANY

This microanalysis of the shadow economy is on informal family income achieving strategies. In particular we analyze both sexes' paid illicit work as well as unpaid work in household production based on the representative West German Sfb3–Secondary Occupation Survey 1984. We estimate the influence of various socioeconomic variables including a legal occupation. As a result, illicit work and household production "Do-It-Yourself" activities are important informal family income achieving strategies. The respective regional state of the formal economy or one's own activities in social networks is of greater importance for informal economic activities than an individual income from formal economic activities.     

Technical coefficients for bio-economic farm household models: a meta-modelling approach with applications for Southern Mali

In recent years, different types of bio-economic models have been developed to support the analysis of the potential impact of agrarian policies on changes in land use, sustainable resource management and farmers' welfare. Most bio-economic models rely on series of discrete input–output coefficients for current and improved cropping and livestock activities, whereas mathematical programming procedures are usually applied to analyse optimum allocative choice. Adequate procedures for the smooth integration of biophysical information into economic decision models are, however, not readily available. This article provides a new and comprehensive framework for the incorporation of technical input–output coefficients derived from agroecological simulation approaches into bio-economic farm household models. Therefore, continuous production functions are estimated for the production side of the farm household model, making use of meta-modelling principles. It is shown that meta-modelling offers considerable scope for improving the specification and behaviour of bio-economic farm household models. This procedure is applied in a farm household model developed for the analysis of farmers’ response to agrarian policies in Southern Mali. Results are presented for the behaviour of a typical household, focusing attention on the trade-offs between farm income and soil nutrient balances under free market conditions and with constraints on labour, capital and animal traction markets. The stability and robustness of the model is analysed through a simulation of the impact of higher input costs for land use and fertiliser applications.     

Structures of foreign trade and income distribution: The case of Mexico

Using Mexico's input-output tables and household survey data, this paper examines various trade strategies and their relationship to commodity production with a view to assesing their effect on the distribution of income. The model incorporates income-induced multiplier effects, taking into account the full range of input import-substitution possibilities. The results show that the differences in the impact on income, particularly, of the lower incomes, are most marked in the tensions between exportable and import-competing activities. On the whole, production per unit of output in the non-tradable sector produces as much factor income as that in the export sector. Expansion of exportable activities marginally improves the economic position of the poor in relation to other income groups, but only when direct effects are taken into account. If, however, domestic production meets the needs of intermediate imports, then the distribution of income remains unaffected by alternative trade strategies.     

Household Satellite Account for France

We estimate in a household satellite account (HHSA) the value of French domestic production in 2010 and 1998, using the input method and following Eurostat's recommendations. In line with previous studies, we find that extending the system of national accounts (SNA) frontier of production to domestic activities (house chores, cooking, care …) has a sizeable effect on key macroeconomic indicators (+33 percent GDP, ?5 p.p. GDP growth, +50 percent disposable income, +58 percent consumption, and ?10 p.p. of purchasing power growth). We conduct a sensitivity analysis to various methodological issues which have not yet been settled by an international benchmark. Quantitatively, the two most important issues are the boundary of household production—we favor a relatively narrow definition—and the use of a gross or a net wage—we prefer gross wage‐. However, estimates are much less sensitive to otherwise greatly debated issues such as which substitute wage to use.     

Microfinance and gender empowerment

In this paper, we develop a theoretical model of household production, bargaining and credit to analyse how access to microcredit affects intra-household decision-making and welfare, and identify conditions under which female household members are most likely to benefit. We show that, consistent with ethnographic accounts of the impact of microcredit programmes on poor households, access to loans can lead to a variety of outcomes for intra-household decision-making and welfare depending on initial conditions and that, in some instances, women borrowers may experience a decline in welfare. We identify two instances in which a woman is most likely to benefit: when there is scope for investing the loan profitably in a joint activity, and when a large share of the household budget is devoted to household public goods.     

A note on lindahl taxes when public goods are inputs to household production

This note explores the incidence of benefit taxation when public goods yield utility only indirectly, as inputs to household production. It provides a condition for tax progression in terms of measurable parameters. The result is contrasted with the usually considered case of public goods being ordinary consumption goods, in which the parameters that indicate whether benefit taxation would be progressive are inestimable because of the preference revelation problem.I am grateful to two referees for insisting on clarifications and for providing useful suggestions.     

Measuring the relative productivity of multitasking to sole-tasking in household production: experimental evidence

The standard household production model does not incorporate multitasking, although time-diary data reveal that individuals regularly multitask. We incorporate multitasking into a household production model in which time spent in childcare can be sole-tasked or multitasked with another household production activity and we present the results of an experiment designed to measure the productivity parameters of this model. Because utility and productivity are intertwined and difficult to disentangle in any household production model, we vary the utility pay-offs our experimental participants receive in order to determine how our estimated productivity parameters are affected by a change in the utility parameters. Our estimates of the relative multitasking productivities indicate that, while a minute of sole-tasked time produces more of a single commodity than a minute of multitasked time, total household output increases when two outputs are produced simultaneously, hence confirming the economic motivation for multitasking.     

A THEORETICAL FRAMEWORK FOR THE MEASUREMENT OF WELL-BEING

The conceptual framework of the system specifies that societal resources are limited by two basic factors: the amount of available human time, and the stock of wealth inherited from the past. Wealth is defined very broadly to cover not only the conventional tangible capital assets familiar to economists, but also intangible human and other capital assets, stocks of organizational capital reflected by networks of social support systems (the family, the neighbourhood), stocks of environmental assets (the sun and air), and stocks of socio-political assets (security, freedom of choice). Human time covers market work, household production, leisure, and biological maintenance. Human time and capital stocks are used within households to produce a variety of tangible and intangible outputs, and these outputs in turn are used to produce a variety of satisfactions (utilities) or to augment stocks of capital, or both. The basic sources of well-being in the system are ultimately of two types: well-being is produced as a consequence of the intrinsic benefits from all activities engaged in by individuals, which is to say that people have preferences over the way they spend their time; secondly, people derive utilities from the existence of various stocks or states of society, and these satisfactions are independent of the way in which time is used. The satisfactions associated with flows of goods are subsumed by satisfactions derived from activities associated with those goods. The system contains a set of linkages among the various parts: inputs of goods and time are used to produce tangible household output, using the familiar notions of household production functions and constrained optimization; tangible household products, which are intermediate in the system, are used in conjunction with human time to produce direct satisfactions or to augment household capital stocks; both household (micro) and societal (macro) capital stocks are linked directly to psychological well-being; household activities are linked directly to flows of satisfactions, termed process benefits in the system; household preferences and values relating to policy variables are linked to public policies of various sorts, and policies modify the constraints and opportunities relevant for household decisions. The system also has dynamic linkages. Modifications of household or public stocks produce impacts on future flows of well-being; satisfactions from activities may adapt to the existence of constraints, hence changes in constraints can modify preferences and subsequently modify activities; and household behavior has a life-cycle dimension which is inherently dynamic.     

Identifying non-cooperative behavior among spouses: Child outcomes in migrant-sending households

I propose a model of household decision-making under asymmetric information and show that resulting allocations may not be fully cooperative. The model yields a simple test for cooperative decision-making, which I apply to data from China. I find that, when the father migrates without his family, children spend more time in household production, while mothers spend less time in both household production and income-generating activities. This is not consistent with standard cooperative models of the household: simply reallocating time to compensate for the father's absence would cause an increase in household labor for both children and mothers and, if migration occurs in response to a negative shock, we should observe an increase in mothers' time in income-generating activities rather than a reduction. The results also do not appear to be driven by an increase in mothers' bargaining power, as children's human capital is not affected by migration, controlling for income.     

THE SIZE OF HOUSEHOLD PRODUCTION: METHODOLOGICAL PROBLEMS AND ESTIMATES FOR THE FEDERAL REPUBLIC OF GERMANY IN THE PERIOD 1964 TO 19801

Household production as well as other informal economic activities have received scant attention in economic science. In the last decade the view has been taken that there has been a big shift from formal to informal production. In order to examine this trend this article presents estimates for the size of household production for the Federal Republic of Germany which are based on time-budget data collected from 1964 to 1980. To show the sensitivity of the results two different estimating methods the Opportunity Cost Method and the Market Cost Method, are used. Since productivity growth took place not only in the formal economy but also in household production, estimates will be presented which take productivity growth explicitly into account. The article concludes with a comparison of estimates for other countries.     

Time use, work and overlapping activities: evidence from Australia

The overlapping of activities is an important dimension of timeuse that has previously received little attention in economicanalysis. Most time-use studies have looked only at primaryactivities, ignoring the fact that individuals often performtwo or more activities simultaneously. This seriously underestimatesthe time spent on several economic activities such as childcareand housework which are also performed as secondary activities.Using a two-adult household sub-sample from the 1992 NationalAustralian Time Use Survey, this paper examines the incidenceand determinants of overlapping activities among 3,966 adultmale and female household members. It first shows that inclusionof overlapping activities in time-use measurements providesa better estimation of the economic contribution of individuals,especially in non-market production. Tobit models are then estimatedto examine the effects of economic, social and demographic factorson the incidence of overlapped work activity. The findings,which are found to be robust, showed that gender, householdlife cycle and composition, education, cultural norms, employmentstatus and level of income earnings influence the extent towhich individuals, particularly women, perform secondary workactivities. Conclusions are drawn in the final section of thepaper.     

SELF‐REPORTED ECONOMIC CONDITION AND HOME PRODUCTION: INTRA‐HOUSEHOLD ALLOCATION IN ITALY

This paper applies a collective model of intra‐household welfare distribution using individual self‐reported data. The model accounts for household production, and self‐reported information on economic condition is used to identify the sharing rule governing the bargaining process in the family. The theoretical framework implies a broad concept of full income, which includes household production as time allocated to domestic activities. We find that self‐reported data on economic status are useful in recovering individual shares of household income and that both wages and non‐strictly‐economic individual variables play an important role in the bargaining process determining the sharing rule in Italy.     

Economic status of households and labour supply to market and non-market activities mdash; some results from a poor rural economy

Assuming a given underlying utility structure for all households, we have demonstrated that the differential labour supply behaviour among household categories results owing to the different sets of constraints they face depending on their economic status and asset ownership. Using the criteria implied by the theoretical model four household gorups are defined. The labour supply functions estimated for these four groups support the theoretical result of significantly different supply behaviour. The empirical exercise, as expected, indicates that the labour supply decision of the subsistence group is guided by their need to achieve the minimum level of consumption while the middle-income households, who do not have enough non-labour income to meet their minimum subsistence need, tend to work longer hours in market activities than the workers from high-income households. However, market labour supply by high-income households is found to be relatively more sensitive to changes in the wage rate. The behaviour of the household groups differ so significantly that if an aggregate model is estimated ignoring inter-household differences, the predicted hours will grossly over-estimate labour supply to market activities.     

Incorporating household production into the National Transfer Accounts for Slovenia

The National Transfer Accounts (NTA) have recently been developed to measure economic flows across age groups. In this article, we extend the NTA for Slovenia by including the value of unpaid household production. Based on time-use data, we discover that people in Slovenia spent even more time on household production than on paid work, which emphasises the necessity of including household production in the NTA analysis. We find that there are large net transfers of household production flowing from adults to children, and to a lesser extent also to the elderly. We calculate unpaid production separately for both genders, and discover that females provide much more unpaid production and total productive work than males. In addition, they face a much more intensive ‘rush hour of life’ than males. We expect that similar patterns may be found in other post-communist countries where equalising labour force participation by gender was central to the communist agenda, but where no similar efforts were undertaken to equalise household work burdens.     

Optimal Redistribution with Productive Social Services

Publicly‐provided private goods are conventionally considered consumer goods. Departing from this perspective, we analyze the public provision of inputs that improve household productivity (e.g., education and childcare). In a two‐class economy with distorting taxation, public provision is always welfare improving with respect to pure taxation, given that the public input directly affects household productivity. Moreover, the case for public provision strengthens as households' heterogeneity in input demand fades out, contrary to consolidated results in the literature. The features of optimal provision schemes depend on the nature of publicly provided input, namely, if it substitutes household productive capacity or just helps households to exploit it.     

Home production and Social Security reform

This paper incorporates home production into a dynamic general equilibrium model of overlapping generations with endogenous retirement to study Social Security reforms. Specifically, home production takes housing, home input, and home hours as inputs and produces a good that is substitutable with market good. As such, the model differentiates both consumption goods and labor effort according to their respective roles in home production and market activities. Using a calibrated model, we conduct a policy experiment where we eliminate the current pay-as-you-go Social Security system. We find that the experiment has important implications for labor supply as well as consumption decisions and that these decisions are influenced by the presence of the home production technology. More importantly, comparing our economy to a one-good economy without home production, the welfare gains of eliminating Social Security are magnified significantly especially in the long run. The reasons are twofold and related to the general aspects of home production. First, home production implies a more elastic labor supply rendering the payroll labor tax more distortionary. Second, home production introduces insurance possibilities that are not present when only market-produced goods are available and, thus, reduces the need for government redistributive policies.     

A test of a unitary model on labour supply using the information of household decision-making systems

This article tests whether a unitary model is consistent with household behaviour using the data of two-earner couples. It focuses on the unitary model assuming that all family members have the same utility function. The analysis investigates the difference in a husband's and wife's labour supply between the household that determines the wife to be the main decision-maker and the household that selects a different decision-making system under the control of individual and household characteristics. The estimation employs a treatment effects model to consider the selectivity bias caused by unmeasured characteristics. Results show that the household with the wife as the main decision-maker increases the husband's working hours by 15% and decreases the wife's working hours by 59%, compared to the household that selects a different decision-making system. This implies that the unitary model is rejected. Additionally, the husband's wage rate, the husband's and wife's health status, and their gambling addiction determine the household decision-making system such as the variables that determine the reservation utility of not being married. The effect of the decision-making system on the labour supply and that of the determinant factors on the decision-making system are consistent with the implications obtained from Nash bargaining models and collective models.     

Accounting for technical substitution in the input-output model

Input-output analysis is a general equilibrium economic model that is being applied with increasing frequency to situations in which the input patterns of various economic activities are bound to change. Applications of the model in this context unduly strain the model's customary assumption of fixed coefficients, an assumption which precludes the substitution of inputs in production processes. The focus here is on the development of a general procedure for incorporating input substitution under various sets of conditions into the input-output model.     

Time-saving innovations, time allocation, and energy use: Evidence from Canadian households

Time and energy are major inputs into the production of household goods and services. As a result, the market penetration of time-saving technologies for general household use is expected to affect both a household's (i) allocation of time across home production and leisure activities; and (ii) energy use. For example, with a household's adoption of a microwave or a dishwasher, cooking food and washing dishes will require less time, and therefore in-home meal preparation may increase. Households with microwaves or dishwashers may also opt to spend more time undertaking other production activities, inside or outside the home, or engage in more leisure (watching TV, reading, exercising). To the extent that time is reallocated from less to more energy-intensive activities in the home, residential energy use will increase as households adopt appliances that embody time-saving technology. Furthermore, an adoption of time-saving technologies for basic household chores, such as meal preparation and laundry, can impact energy use due to the fact that many time-saving technologies are more energy intensive than alternative technologies that require larger time commitments. In this paper, we use the Canadian Survey of Household Energy Use data from 2003 to examine the extent to which ownership of products that embody time-saving innovations affects time allocation and energy use at the household level.