The expected response of individuals to policy changes usually requires that they use their resources in a different way, according to the changed relative opportunity cost of undertaking each that the policy effects. However, it has often been noted that the allocation of time to different activities does not respond smoothly, and rather appears to be influenced by a range of non economic factors that lead to opportunity costs and trade-offs being different for different individuals, depending not just on the constraints they face, but also on the activities they are already ‘specialised’ at. In this paper we use the British Household Panel Survey to examine how time packages - the allocation of weekly hours to a combination of paid and unpaid work and leisure - affect life satisfaction, and the marginal returns from additional hours spent in paid work, overtime, caring and housework. We observe that for men in general, the marginal benefits of an additional hour of paid work, or extra work (in the form of overtime or a second job) are positive, while an additional hour of caring has a negative effect on life satisfaction. For men who are leisure rich, however, the marginal benefits of an additional hour of housework are positive. Leisure rich men appear to gain satisfaction from doing housework, in a way that other men do not. The same applies to women. Women are in general less satisfied by taking on overtime or second jobs, presumably preferring to use that discretionary time at home in leisure pursuits or with children. For women doing full-time paid work, the marginal effect of an additional hour of extra work (overtime or a second job) is negative; for women already stretched by full-time paid work, extra hours are an unwelcome burden. We discuss the role that different kinds of constraints, including gender attitudes, play in determining our results and the implications for policy design.
