Allocation Of Working Time

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In reality, the allocation of one’s time depends on trade-offs more complex than a simple choice between work and leisure. It is important to know that the counterpart of paid work is not only limited to leisure, it also consists of time devoted to ‘‘household production’’. The raising of children is one kind of household production.

There are two methods for raising children during the daytime, sending them to the daycare institutions or staying at home to take care of them instead of going to work.
The allocation of working time between household and waged activities is determined by the relative productivities of the two types of activity. Thus, a woman has an interest in devoting her working time to household activities to the extent that the marginal productivity of an hour of this type of work is superior to an hour’s wage. Thus, the length of time she would like to give household work to the point where marginal productivity of household work equal to wages.

Thus, as the problem indicated, extending the Quebec’s 7 dollars a day childcare subsidy to the whole nation would decrease marginal productivity of staying at home to take care of children activity.

a. Changes to the women who are already working (Figure 1)
Regarding to the working women, the decrease of the expense on children daycare may seemed as increase of non-labour income, which means the endowments level increase from point A to point B. Because of the wage level remain the same, the slope of the curve do not change. If the individual think leisure time is normal goods, she want to get more leisure time because of the income effect. The working hours for them decrease to T-L’ from T-L (Point E to Point E’). If the individual think leisure time is inferior

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