Institutions, Social Norms, and Bargaining Power: An Analysis of Individual Leisure Time in Couple Households

Following the collective utility approach, we model household utility as a weighted
average of the utility of the two partners in the household (denoted by the subscripts M for
male and F for female). Individual utility is modeled as a function of individual consumption
levels (c), individual leisure (L), and the level of the household public good that is produced.
This household good is produced by combining labor inputs from each partner (H) according
to a production function P.

(2)    Uhh = θ Uf(cf, P(Hf,Hm), Lf) + (1-θ) Um(cm, P(Hf, Hm), Lm)

The weights (θ) are a function of the earnings ability of each partner (w) and other
distributional factors (S). As in Chiappori, Fortin, and Lacroix (1998), these distributional
factors influence the weights but do not themselves influence utility.

(3) θ = Θ(wf,wm,S)

Households act to maximize their utility subject to income and time constraints.

Income Constraint:   c_F + c_M + w_f H_f + w_m H_m + w_f L_f + w_m L_m ≤ Y + Tw_f + Tw_m

Time Constraint:    Ha + La + Ea = T where a = M for men and F for women

where goods’ prices are normalized to one, T is the total amount of time available, and E is
the time employed in the market.

A higher θ means that the preferences of the woman receive greater weight when
resources are allocated within the household. Our focus in this analysis is upon the role of
cross-country differences in social norms and welfare systems acting as a distributional factor
(S) influencing θ. Specifically we focus on comparing how partners in couple households
allocate their time in American as compared to Danish households. In general there is
evidence that the factors driving time use are quite similar across countries (Geist 2005). Our
hypothesis is that power considerations will be of less importance in Denmark as compared to

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