Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/31464 
Year of Publication: 
2006
Series/Report no.: 
Working Paper No. 454
Publisher: 
Levy Economics Institute of Bard College, Annandale-on-Hudson, NY
Abstract: 
Although income inequality has been studied extensively, relatively little attention has been paid to the role of household production. Economic theory predicts that households with less money income will produce more goods at home. Thus extended income, which includes the value of household production, should be more equally distributed than money income. We find this to be true, but not for the reason predicted by theory. Virtually all of the decline in measured inequality, when moving from money income to extended income, is due to the addition of a large constant-the average value of household production-to money income. This result is robust to alternative assumptions that one might make when estimating the value of household production.
Subjects: 
Inequality
household production
time use
JEL: 
D31
D13
J22
Document Type: 
Working Paper

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