Abstract

This dissertation contains three essays that estimate the intertemporal substitution elasticities of a life cycle model that includes home production. The first essay studies the impact of including home work hours in the estimated intertemporal substitution elasticity of labor supply. We use the employment information of employed males obtained from Panel Study in Income Dynamics and Canadian Time Use datasets. We then estimate the elasticities using a two-stage estimation strategy. Our results suggest that the estimated inter-temporal substitution elasticity in the extended home production life cycle model is lower than the one in standard life cycle model without including home production. Our results are in contrast to the results obtained by Rupert et al. (2000), where they report the estimated inter-temporal substitution elasticity in the home production model to be higher than the one in standard life cycle model. The second essay critically evaluates the estimated results obtained by Rupert et al. (2000). We investigate the estimated employed male labor supply elasticities of the home production function by using the Three Time Use datasets that are employed by Rupert et al. By utilizing the two-stage estimation strategy and the generalized least square estimating method, we find that there is no evidence indicating that the estimated inter-temporal labor elasticities of employed male with home production are higher than the ones without home production. The final essay measures the inter-temporal labor supply elasticities with home production using various employed female datasets as well as different estimation methods. Using the same methodology and datasets as the previous two essays, we find that the empirical results do not provide any conclusive evidence to support the hypothesis that the home production function has increased the estimated intertemporal substitution elasticity of employed female compared to the previous results estimated without home production. Overall, the estimated results of all three essays indicate that there seems to be some willingness to substitute total (market and home) hours over the life cycle for both the employed male group and the employed female group, but it is most likely smaller than the willingness to substitute market hours over the life cycle in response to wage changes. [PUBLICATION ABSTRACT]