Acknowledgements

Abstract

The allocation of time is a crucial decision that influences many aspects of household welfare. According to standard theory it depends on the potential wage rate of spouses relative to their domestic productivity. A major problem, however, is that individual productivities are not observed. As a consequence, an important source of difference in household living standards alongside with heterogeneity in preferences and wage rates, cannot be accounted for. This paper presents a new methodology to estimate individual domestic productivity based on the informational content of a standard time use survey, with time inputs observable but domestic output immeasurable. It provides empirical evidence based on a sample of French two-earner couples. As a test of the empirical validity of this approach, the paper shows that the estimate of female domestic productivity is a significant variable in explaining the overall intra-household distribution of resources