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We analyze the economic determinants of couples' decisions to allocate their available time across market work, home work, and leisure using the German Time-Use Surveys of 2001/02 and 2012/13. These data allow identifying actual couples who can be married or cohabiting. Specifically, we use Bayesian indirect inference to estimate a static model of couples' time-allocation decisions allowing for `no market work' as a possible outcome. The model features intra-household and inter-household heterogeneity. Partners differ in their tastes for purchased consumption goods and non-market goods and activities as well as in their offered or earned wage rate. We use the estimated model as a lab for counterfactual exercises in the cross-section. We find own-wage and cross-wage elasticities of hours worked to be larger for females than males, and that the extensive margin of adjusting employment is quantitatively more important than the intensive margin. We also aggregate preferences and wages by gender and compare outcomes for a stand-in couple with those from heterogeneous couples. We find that preferences rather than wages are the prime determinant of labor-leisure choices in the aggregate, especially for females.
JEL-Classification: D12, D13, J22.
Keywords: time-use, family labor supply, aggregation, Bayesian estimation
