More wages, more income, more leisure? Evidence from Thailand’s time use survey

ABSTRACT

Does more income mean more leisure? This paper investigates the impact of wages and income on leisure time using merged data from two nationally representative samples in Thailand: (1) the Time Use Survey, and (2) the Labor Force Survey. Results will depend on our definition of income or wages. The data indicate that Thai people tend to reduce their leisure time in response to monthly income changes. The reason for such a negative relationship is that monthly income is composed of extra income other than wages, for example, overtime and bonus pay, which are found to be inversely related to leisure time. However, when the relationship between leisure time and hourly wage is estimated, we find that an increase in hourly wage substantially and significantly induces people to engage in more leisure and that a percentage change in hourly wage also provides a positive percentage change in leisure time.

KEYWORDS:

• Leisure
• income
• wage
• Thailand

Notes

1. In mainstream economic theories, labor supply is the total hours (adjusted for intensity of effort) that workers wish to work at a given real wage rate. It is frequently represented graphically by a labor supply curve, which shows hypothetical wage rates plotted vertically and the amount of labor that an individual or group of individuals is willing to supply at that wage rate plotted horizontally. Labor supply curves derive from the “labor-leisure” trade-off. More hours worked earn higher incomes but necessitate a cut in the amount of leisure that workers enjoy.

2. In the theory, there are two effects on the amount of labor desired to be supplied due to a change in the real wage rate. For example, the real wage rate raises the opportunity cost of leisure increases. This tends to make workers supply more labor (the “substitution effect”). However, as the real wage rate rises, workers earn a higher income for a given number of hours. If leisure is a normal good—meaning that the demand for it increases as income increases—this increase in income tends to encourage workers to supply less labor so they can “spend” the higher income on leisure (the “income effect”). If the substitution effect is stronger than the income effect, then the labor supply slopes upward. If, beyond a certain wage rate, the income effect is stronger than the substitution effect, then the labor supply curve bends backward. Individual labor supply curves can be aggregated to derive the total labor supply of an economy.

3. See, for example, Becker (1965), then Becker (1981).

4. For example, Owen (1971), Gronau (1977), and Yamada et al. (1999).

5. Whereas the cost of basic utilities in the US was around five percent of income, earners in Thailand had to pay 13% of income for basic utilities.

6. Many papers have defined leisure in various ways. According to Wilson (1980), leisure referred to the activities that had neither a static nor a fixed posture, while Neulinger (2013, quoted in Westland, 1987) stated that leisure was the condition of perceived freedom. Westland (1987, p. 228) equated leisure with free time for doing something else. Soule (1957) further elaborated and listed leisure activities as rest, idleness, play, or recreation.

7. See Fischer (2001), Kumar (2005), and Chen and Chevalier (2007).

8. For example, Yamada et al. (1999) divided allocation of time into market and specific non-market activities, for example, spending time with the radio and TV and sleeping.

9. Childcare, adult care, and unpaid work can hardly be treated as leisure. Even though the most common definition of leisure by economists has been non-work time, most such unpaid work (e.g., childcare, adult care, or cooking) is considered not to be leisure although in some instances it may be done for enjoyment and serve as a hobby (Enke, 1968).

10. The measurement of leisure here can be only applied for economic literature but it can different from other leisure literature.

11. During merging activities, we had to work with Thailand’s National Statistical Office to verify the secret and closure of ID number.

12. According to Time Use Survey 2004, The finding corresponded to much empirical research, for example, Ilahi (2000), Schettkat (2003), and Aguiar and Hurst (2007). This corresponds to Beblo and Robledo’s (2008) explanation of social structure in which males “make the first move,” implying that males have the opportunity to choose to work only in the market while females are responsible for working both in the market and doing housework and home production. Hence, females corresponded to non-market work, especially housework.

13. The average work time per day of people in agricultural, manufacturing and service sectors were 379, 418, and 425 minutes, respectively.

14. Monthly income comprises monthly wage, overtime, bonus per month, and other income. Other pecuniary benefits accrue in the form of welfare, for example, welfare meals and welfare clothing.

15. From an economics point of view, normal goods are any goods for which demand increases when income increases and falls when income decreases, but price remains constant, i.e., with a positive income elasticity of demand. The term in this case does not necessarily refer to the quality of the goods, but refers to how Thai people spend their time regarding the change in their income.