IZA DP No. 1855: Gender, Time Use and Public Policy over the Life Cycle
published in: Oxford Review of Economic Policy, 2005, 21(3), 439-461
In this paper we compare gender differences in the allocation of time to market work, domestic work, child care, and leisure over the life cycle. Time use profiles for these activity categories are constructed on survey data for three countries: Australia, the UK and Germany. We discuss the extent to which gender differences and life cycle variation in time use can be explained by public policy, focusing on the tax treatment of the female partner and on access to high quality, affordable child care. Profiles of time use, earnings and taxes are compared over the life cycle defined on age as well as on phases that represent the key transitions in the life cycle of a typical household. Our contention is that, given the decision to have children, life cycle time use and consumption decisions of households are determined by them and by public policy. Before children arrive, the adult members of the household have high labour supplies and plenty of leisure. The presence of pre-school children, in combination with the tax treatment of the second earner's income and the cost of bought-in child care, dramatically change the pattern of time use, leading to large falls in female labour supply. We also highlight the fact that, in the three countries we study, female labour supply exhibits a very high degree of heterogeneity after the arrival of children, and we show that this has important implications for public policy.