Working Paper Series, Department of Economics, University of Mannheim 14-09
We document for the US and Continental Europe that home–production time remained essentially flat during the last 50 years while changes in market time and leisure offset each other. We then focus on the US and France during 1970–2005 which are on the opposite sides of the spectrum: while US market time did not change much, French market time decreased most strongly. We document for the US and France that capital in home production and imputed labor productivities of home production have risen. We build a version of the growth model with capital in market and home production to account for the time allocation in both countries. We find that the interaction between taxes, home capital, and home–labor–augmenting technical change is crucial.