Claire feels like she is not contributing to the family because she doesn’t have a job. She has applied to 5 jobs recently, but despite her college degree, she is rejected from all of them. Because she has been out of the labor force for so many years, her human capital has depreciated. The second important component of this scene is to consider the non-pecuniary benefits of work. Not all workers are income maximizers as some have other motivations for working in paid employment.
See more: college, education, human capital, human capital investments, human capital depreciation, job search, labor force, labor force participation, labor market, nonpecuniary benefits, skills, unemployment
It is career day at Luke’s school, and the teacher asks Claire to speak about her job as a stay at home mom. She points out that she actually has a lot of different jobs as a stay-at-home-mom. The household production model assumes that agents decide between working at paid work or working at home and producing things that they could have bought with income. Both yield some level of utility, but some partners will specialize in household production depending on the relative wages of the other partner.
One of the downsides of specializing in household labor is that people lose specific and general human capital associated with market work. While Claire would like to go back to work, it is hard to find a job after you have been out of the labor force for 15 years, mainly because everyone who didn’t drop out would have continued learning new skills. In labor economics, this is known as The Mommy Track.
See more: household labor supply, household production, human capital depreciation, job search, labor force, labor force participation, labor market, skills, tradeoffs, unemployment
With Lilly in school and Cam & Mitchell unsure about adopting another baby, Mitchell thinks it’s a good time for Cam to get a job. Mitchell works with his friend Longeness to secure Cam a job at a local boutique under the guise that the shop needs someone to work and Cam just happens to be available. Cam initially accepts because it seems like a great match for his tastes and skill set, but Jeoux lets the cat out of the bag that it wasn’t a sincere offer, and Cam is offended that Mitch thinks he is too lazy to get a job.
In the Household Production model, decision makers must decide whether to supply their labor for paid employment or supply their labor at home in household production. Cam lists many of the household production items that he produces with his labor, including paying bills, grocery shopping, and maintaining the house. Each of these items produce utility for the household, which could be purchased with Cam’s income. A secondary consideration of work, beyond the household production model is nonpecuiniary benefits of work like social interaction and purpose.
See more: household production, human capital, labor force, labor-leisure tradeoff, labor supply, marginally attached, nonpecuniary benefits, search, tastes and preferences, tradeoffs, unemployment
Claire is going to meet an old friend from work, but her kids are surprised to find out that she once had a job. She describes why she chose to leave the workforce. The household production model allows for workers to determine if they would prefer to produce items for household consumption or work in the paid labor force to purchase those same item. Claire must have steep indifference curves given she quit the labor force to produce household items.
See more: comparative advantage, division of labor, household labor supply, household production labor force, labor force participation, labor supply, preferences, specialization, tradeoffs