Unit 3 Doing the best you can: Scarcity, wellbeing, and working hours

3.11 Explaining our working hours: Gender and working time

Almost everywhere in the world, women are less likely than men to do paid work. Women who work for pay do fewer hours than men, on average. According to data collected for 30 higher-income countries, working-age women spend an average of three hours 38 minutes per day undertaking either paid work or study. The average time for men is five hours 18 minutes.

We know from our model that wages are an important factor in workers’ decisions on working hours. It is possible that women make different choices because their rewards from undertaking paid work are lower, due to discrimination in the labour market. Although many countries now have equal pay laws, requiring that men and women receive the same wages for similar work, there is still a substantial gender wage gap. Figure 3.19 shows the gender gaps in both paid work and wages for five countries.

In this bar chart, the horizontal axis shows the following countries: Australia, Korea, the Netherlands, Sweden, and the US. The vertical axis shows the difference between median earnings and average paid hours worked per day of male and female full-time employees, as a percentage of male earnings. For each country, the paid hours gap and the wage gap are respectively: Australia (43%, 16%), Korea (35%, 34%), the Netherlands (30%, 13%), Sweden (12%, 7%) and the US (25%, 19%).
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Figure 3.19 Gender gaps in wages and hours of paid work.

OECD. Time Use. Accessed June 2022.; OECD. Gender wage gap. Accessed June 2022.
Note: The gender wage gap is the difference between median earnings of male and female full-time employees, as a percentage of male earnings. The hours gap is the difference between the average paid hours worked per day by men and women of working age, as a percentage of male hours. So a gap of 30% means that women’s wages or hours are 30% lower than men’s.

Could the gender wage gap explain why women do less paid work?

We have seen that higher wages can lead to lower or higher working hours, depending on preferences. Lower wages for women give them a reduced incentive to work (the substitution effect), but the income effect works in the opposite direction. If the substitution effect dominates, it is possible that lower wages could lead women to choose lower hours. But even the large changes in wages over the twentieth century led to a smaller difference in working hours than the difference in hours between men and women—and in that case lower wages were associated with higher hours. It seems unlikely that the wage gap alone could explain the hours gap.

For a more plausible explanation, we need to take account of the reasons people value free time. In our model, ‘hours of work’ is time spent in ‘market work’—that is, work done in return for an income. ‘Free time’ is everything else; its value to different people will depend not only on their opportunities for social and leisure activities, but on how much time they need for other, unpaid work—such as cooking, cleaning, shopping, and childcare.

Researchers have found that big differences between men’s and women’s work emerge when they have children. Women’s earnings fall substantially when their first child is born, and remain permanently lower than they were before. But the birth of a child makes almost no difference to the earnings of men.

The ‘child penalty’ for women ranges from 21% of earnings in Denmark to 44% in the UK and over 60% in Germany.1

gender division of labour
The ways men and women differ in how they spend their (paid and unpaid) work time.

This suggests that we may observe a gender division of labour in families, with women more likely to undertake domestic work, particularly childcare. Figure 3.20 shows evidence from time use studies, in which people are asked to keep detailed time diaries recording their activities throughout the day. In every country for which we have data, men spend more time on paid work than women, but women spend more time on unpaid work than men.

In this bar chart, the horizontal axis shows the following countries: China, India, the US and Europe. The vertical axis shows the average minutes per day of paid and unpaid work, for women and men, ranging from 0 to 600. Minutes of paid and unpaid work are respectively: in China (295, 210 for women, 395, 90 for men), in India (190, 320 for women, 400, 45 for men), in the US (250, 255 for women, 310, 190 for men), in Europe (210, 200 for women, 300, 120 for men).
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Figure 3.20 Average minutes per day of paid and unpaid work, for women and men.

OECD. Time Use. Accessed June 2022.; OECD. Gender wage gap. Accessed June 2022.

Modelling paid and unpaid work in the household

In search of an explanation for gender differences in patterns of work, we will apply our model of working hours to the case of a couple (Ana and Luis) with two young children. Suppose they have the same preferences and similar skills, and can both find employment at the same wage, $30 per hour. They have worked out that the household needs 14 hours of domestic work, including childcare, per day.

Together, the couple have 48 hours in total per day, to allocate between paid work, domestic work, and other (non-work) activities. They agree that total consumption should be shared equally, and that they should both spend the same amount of time working, whether paid or unpaid. They both want to have time for other activities, including rest and relaxation.

The axes in Figure 3.21 show the two goods they value: household consumption and non-working time. Since they both have the same preferences and share goods equally, we can easily work out the household’s preferences and draw the indifference curves. For example, to work out how the household values the combination of 20 hours of non-working time and $300 of consumption relative to other points, we just need to ask the parents how they individually value ten hours of working time and $150 of consumption.

If they have \(t\) hours of non-working time, and spend 14 hours on domestic work, their hours of paid work will be \(h = 48 - 14 - t\). With an hourly wage \(w\), they will have total consumption \(c = wh\). Hence their budget constraint is given by:

\[c = w(34 - t)\]

Figure 3.21 shows the household’s feasible set, and preferred choice of consumption and non-working time, when the hourly wage is $30. The household obtains greatest utility at point B where the indifference curve is tangent to the feasible frontier: the marginal rate of substitution between consumption and non-working time is equal to the wage.

In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption in dollars. Coordinates are (hours of non-working time, consumption). Three parallel, downward-sloping, convex curves are shown. Point B (22, 360) lies on the middle one of these curves. Point N has coordinates (34, 0). A straight line connects point N with point B and point (0, 600). It is tangent to the middle one of the curves at point B.
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Wage Domestic work Paid work Non-working time Earnings Consumption
Ana $30 7 6 11 $180 $180
Luis $30 7 6 11 $180 $180
Household 14 12 22 $360 $360

Figure 3.21 The household’s choice of consumption and non-working time.

Household preferences: In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption in dollars. Coordinates are (hours of non-working time, consumption). Three parallel, downward-sloping, convex curves are shown. Point B (22, 360) lies on the middle one of these curves.
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Wage Domestic work Paid work Non-working time Earnings Consumption
Ana $30 7 6 11 $180 $180
Luis $30 7 6 11 $180 $180
Household 14 12 22 $360 $360

Household preferences

Ana and Luis have the same preferences for non-working time and consumption, and share time and consumption equally. If we choose any two points and ask Ana and Luis which they prefer, they will both give the same answer. So we can draw indifference curves for the household.

Hours of non-working time: In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption in dollars. Coordinates are (hours of non-working time, consumption). Three parallel, downward-sloping, convex curves are shown. Point B (22, 360) lies on the middle one of these curves. Point N has coordinates (34, 0).
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Wage Domestic work Paid work Non-working time Earnings Consumption
Ana $30 7 6 11 $180 $180
Luis $30 7 6 11 $180 $180
Household 14 12 22 $360 $360

Hours of non-working time

The horizontal axis shows the household’s total hours of non-working time. It has 48 hours in total, but 14 are used for unpaid work. If the household does no paid work, it is at point N, (34, 0).

Hours of paid work: In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption in dollars. Coordinates are (hours of non-working time, consumption). Three parallel, downward-sloping, convex curves are shown. Point B (22, 360) lies on the middle one of these curves. Point N has coordinates (34, 0). A straight line connects point N with coordinates (14, 600)with point B and point (0, 600). It is tangent to the middle one of the curves at point B.
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Wage Domestic work Paid work Non-working time Earnings Consumption
Ana $30 7 6 11 $180 $180
Luis $30 7 6 11 $180 $180
Household 14 12 22 $360 $360

Hours of paid work

For each hour of paid work, the number of non-work hours decreases below 34. The budget constraint is a line through point N, with slope corresponding to the wage, showing the total amount of consumption available to the household for each level of non-working hours.

The household’s preferred choice: In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption in dollars. Coordinates are (hours of non-working time, consumption). Three parallel, downward-sloping, convex curves are shown. Point B (22, 360) lies on the middle one of these curves. Point N has coordinates (34, 0). A straight line connects point N with point B and point (0, 600). It is tangent to the middle one of the curves at point B.
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Wage Domestic work Paid work Non-working time Earnings Consumption
Ana $30 7 6 11 $180 $180
Luis $30 7 6 11 $180 $180
Household 14 12 22 $360 $360

The household’s preferred choice

Point B, where the budget constraint is tangent to an indifference curve, is the household’s preferred choice of consumption and non-working time.

At B, the household has 22 non-working hours. In addition to the 14 hours required for domestic work it does 12 hours of paid work, so it has $360 of consumption. Individually, the parents can each do six hours of paid work and seven hours of unpaid work, and have $180 for consumption, as shown in the table.

How would their choice be different if Ana faced gender discrimination, and was only able to find employment at a wage of $17? In this situation, for a given amount of paid work, the household could increase its consumption and utility if Luis did more of the paid hours, and fewer of the unpaid hours. We will assume, however, that it is not possible for Luis to do more than 8 hours of paid work per day (for example, because of a law regulating working time).

Work through Figure 3.22 to see how the feasible set changes in this situation, and the effect on the household’s choice.

In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption, and ranges between 0 and 600. Coordinates are (hours of non-working time, consumption). A straight line connects points (34, 0) and K (26, 240). A dashed line connects points K and (14, 600). Point B (22, 360) lies on the dotted line. A downward-sloping, convex curve is tangent to the dashed line at point B. A straight line connects points K and (14, 444). A downward-sloping, convex curve is tangent to this line at point D (24, 274).
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Wage Domestic work Paid work Non- working time Earnings Consumption
Ana $17 10 2 12 $34 $137
Luis $30 4 8 12 $240 $137
Household 14 12 24 $274 $274

Figure 3.22 The household’s choice when Ana receives a lower wage than Luis.

If Luis works and Ana doesn’t: In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption, and ranges between 0 and 600. Coordinates are (hours of non-working time, consumption). A straight line connects points (34, 0) and K (26, 240). A dashed line connects points K and (14, 600). Point B (22, 360) lies on the dotted line.
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Wage Domestic work Paid work Non- working time Earnings Consumption
Ana $17 10 2 12 $34 $137
Luis $30 4 8 12 $240 $137
Household 14 12 24 $274 $274

If Luis works and Ana doesn’t

If household hours of paid work are between zero and eight, non-working time is between 34 and 26. Income is higher if Luis does the paid hours, earning $30 per hour. So the household budget constraint has a slope of –30 between (34, 0) and point K (26, 240).

If both work: In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption, and ranges between 0 and 600. Coordinates are (hours of non-working time, consumption). A straight line connects points (34, 0) and K (26, 240). A dashed line connects points K and (14, 600). Point B (22, 360) lies on the dotted line. A straight line connects points K and (14, 444).
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Wage Domestic work Paid work Non- working time Earnings Consumption
Ana $17 10 2 12 $34 $137
Luis $30 4 8 12 $240 $137
Household 14 12 24 $274 $274

If both work

Luis cannot do more than eight hours of paid work. So if the household decides to do more than eight paid hours, Ana will work the additional hours at a wage of $17. The slope of the budget constraint beyond point K (26, 240) is –17.

The feasible set is smaller: In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption, and ranges between 0 and 600. Coordinates are (hours of non-working time, consumption). A straight line connects points (34, 0) and K (26, 240). A dashed line connects points K and (14, 600). Point B (22, 360) lies on the dotted line. A straight line connects points K and (14, 444).
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Wage Domestic work Paid work Non- working time Earnings Consumption
Ana $17 10 2 12 $34 $137
Luis $30 4 8 12 $240 $137
Household 14 12 24 $274 $274

The feasible set is smaller

The feasible set is the area below the kinked budget constraint. Wage discrimination means that the household can no longer reach point B.

The household’s choice.: In this diagram, the horizontal axis shows hours of non-working time, and ranges between 14 and 34. The vertical axis shows total household consumption, and ranges between 0 and 600. Coordinates are (hours of non-working time, consumption). A straight line connects points (34, 0) and K (26, 240). A dashed line connects points K and (14, 600). Point B (22, 360) lies on the dotted line. A downward-sloping, convex curve is tangent to the dashed line at point B. A straight line connects points K and (14, 444). A downward-sloping, convex curve is tangent to this line at point D (24, 274).
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Wage Domestic work Paid work Non- working time Earnings Consumption
Ana $17 10 2 12 $34 $137
Luis $30 4 8 12 $240 $137
Household 14 12 24 $274 $274

The household’s choice.

Household utility is now maximized at the tangency point at D, where Luis does eight hours of paid work, and Ana does two.

The new preferred choice is at point D, with 24 hours of non-working time. Luis does eight hours of paid work and Ana two hours. As before they share total hours of work and consumption equally, so now Ana does much more of the domestic work. The table shows the outcome for each parent.

Not only does the lower wage reduce Ana’s hours of paid work and lead to an unequal distribution of time between the two parents, it also reduces the total amount of paid work they do. The household’s overall consumption is lower not only because Ana’s wage is low, but because they choose to do less paid work altogether.

The lower wage for Ana has a substitution effect: the opportunity cost of an hour of non-working time is now only $17, reducing the incentive to work and increasing the amount of non-working time. As usual, it also has an income effect in the opposite direction: lower earnings lead the household to reduce the amounts of both goods. But in this household model, with two wage-earners, the income effect is small: the change in Ana’s wage has no effect on the income from the eight hours worked by Luis. That is why the substitution effect dominates, and the paid hours worked by Ana fall from six to two.

This analysis shows how gender discrimination in the labour market combined with joint household decisions on working time could lead to a gender division of labour, with women working fewer hours for pay. It cannot be the whole story, however, because the model assumes an equal distribution of consumption and total work time within households. It doesn’t explain why in most countries (those shown in Figure 3.20) women work more hours in total than men. To explain that we would need to explore other possibilities, such as differences in preferences between men and women, imbalance of power within households, and social gender norms that limit the choices available to women.

Question 3.13 Choose the correct answer(s)

Read the following statements about gender differences in working hours and wages and choose the correct option(s).

  • Figure 3.19 shows that males are paid a higher wage than women for doing similar jobs.
  • If wages for women fall, and we observe women working fewer hours, then the substitution effect dominates the income effect.
  • The gender wage gap alone explains why women work fewer paid hours than men.
  • The example in Figure 3.22 shows that wage discrimination can result in a reduction in a household’s total paid hours and consumption.
  • The wage differences in Figure 3.19 are not like-for-like comparisons. They capture differences in the types of jobs that men and women do. For example, compared to women, men may be more likely to work in sectors that have higher average wages, and occupy a greater proportion of senior positions in a firm.
  • If working hours fall when the wage falls, the substitution effect (reduce working hours as the opportunity cost of free time is lower than before) must dominate the income effect (increase working hours to earn the same income as before).
  • The gender wage gap alone cannot explain why women work fewer hours than men. But the gender wage gap may lead to gender division of labour within households, with women taking on more unpaid domestic work.
  • When both wage-earners are paid the same hourly wage of $30, total consumption and working hours are higher than when one wage-earner is paid an hourly wage of $30 and the other of $17.

Exercise 3.11 Gender and changes in working time

In many countries, educational opportunities for women have improved in recent decades, and laws against labour market discrimination have been introduced or strengthened. New and improved domestic appliances have become widely available. How would you expect these changes to affect:

  • paid and unpaid working time in households with children?
  • average working hours per worker?

Exercise 3.12 Unpaid work, gender, and support for childcare

Making use of the following information and Figure 3.23, describe and suggest explanations for the cross-country differences in time spent on unpaid work shown in the figure.

  • Finland has the lowest pay gap between men and women, and generous maternity and paternity leave.
  • In Belgium, most children are in childcare outside the home from the age of 30 months.
  • The US is among the least generous of high-income countries for parental leave and subsidized childcare, and women with young children often continue to work full-time.
This bar chart shows minutes per day spent by men and women doing unpaid care work in Belgium, Finland, and the US. In Belgium, minutes per day were: 220 for women with no children and 160 for men with no children, 310 for women with children under 5 and 180 for men with children under 5. In Finland, minutes per day were 170 for women with no children and 120 for men with no children, 380 for women with children under 5 and 220 for men with children under 5. In the US, minutes per day were 210 for women with no children and 130 for men with no children, 370 for women with children under 5 and 190 for men with children under 5.
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Figure 3.23 Total time spent doing unpaid care work by men and women in Belgium, Finland, and the US.

Calculated from International Labour Office. 2018. ‘Care work and care jobs for the future of decent work’. Geneva pp. 67. Note: Latest year of available data is 2013 for Belgium, 2009 for Finland, and 2016 for the US.

Exercise 3.13 Domestic technology and time use

Hans Rosling describes, in this video, the impact that the advent of the washing machine had on the time available to his grandmother. If this example is typical, how do improvements in domestic technology affect the way we spend our time? What other effects might they have?

  1. Henrik Kleven, Camille Landais, Johanna Posch, Andreas Steinhauer, and Josef Zweimüller. 2019. ‘Child Penalties Across Countries: Evidence and Explanations’. AEA Papers and Proceedings 109: pp. 122–126.