The paper tries to formalize the trichotomy of work in the market, work at home, and leisure. Time is used at home to produce home goods that are perfect substitutes for market goods, where home production is subject to diminishing marginal productivity. An increase in the market wage rate is expected to reduce work at home, while its effect on leisure and work in the market is indeterminate. An increase in income increases leisure, reduces work in the market, and leaves work at home unchanged. These conclusions are supported by empirical tests based on the Michigan Income Dynamics data, as well as by previous time budget studies. Further implications for labor supply, fertility, gain from marriage, demand for child care, and the measurement of home output are investigated.

The paper tries to formalize the trichotomy of work in the market, work at home, and leisure. Time is used at home to produce home goods that are perfect substitutes for market goods, where home production is subject to diminishing marginal productivity. An increase in the market wage rate is expected to reduce work at home, while its effect on leisure and work in the market is indeterminate. An increase in income increases leisure, reduces work in the market, and leaves work at home unchanged. These conclusions are supported by empirical tests based on the Michigan Income Dynamics data, as well as by previous time budget studies. Further implications for labor supply, fertility, gain from marriage, demand for child care, and the measurement of home output are investigated.

The labor force participation of Jewish women in Israel increased between 1955 and 1980, accelerating in the 1970s. Schooling accounts for most of the change. The sharpest rise is among mothers ages 25-44. Thus differentials in participation by marital status have been sharply narrowed and the life cycle in participation has been transformed, the M-shaped curve being replaced by an inverted U with delayed labor force entry due to prolonged schooling and more continuous participation throughout the childbearing period. The reduced incompatibility between child rearing and market work is associated with part-time work and increased reliance on day-care services. The increased employment of women is concentrated in the service industries, mostly public, and is accompanied by some decline in the relative wage of highly educated women. Successive cross-section estimates corroborate this picture in general but do not support the notion that over time preschool children interfere less in women's labor supply.

Journal Article Expected Interruptions in Labour Force Participation and Sex-Related Differences in Earnings Growth Get access Yoram Weiss, Yoram Weiss Tel Aviv University Search for other works by this author on: Oxford Academic Google Scholar Reuben Gronau Reuben Gronau Hebrew University and the National Bureau of Economic Research Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 48, Issue 4, October 1981, Pages 607–619, https://doi.org/10.2307/2297200 Published: 01 October 1981 Article history Received: 01 October 1980 Accepted: 01 March 1981 Published: 01 October 1981