The American Time Use Survey for 2009 is out. Comparing its results-at a business-cycle trough-to those for 2007 (roughly a cyclical peak) allows for the first resolution of a fundamental question in time allocation/labor supply and macroeconomics: What do people do with their time when aggregate labor demand drops?
Some macroeconomists have constructed beautiful models arguing that much of the reduced market time can be shifted to producing things at home-to household production (child care, food preparation, shopping, home repairs, etc.) that would otherwise have been purchased. WRONG! In this recession, average work time (including school) dropped by 15 minutes a day. Of this drop, 6 minutes went to additional sleeping; and another 6 minutes went to additional TV-watching. The average American actually spent 2 minutes less on household production. The recession didn’t shift work from market to home activities that we think of as productive; the drop in market work went into activities that, at least at the margin, most of us would view as unproductive.