How Working Hours Affect Household Consumption Patterns?

Abstract The popularity of the mobile Internet and third-party payments has made online consumption an important alternative to offline consumption, which may have an impact on the equilibrium conditions of the classical consumption-leisure model. This paper introduces two different consumption patterns, online and offline, into the classical consumption-leisure model, and theoretically deduces the relationship between working hours and total consumption and consumption patterns, and empirically tests the impact of working hours on total consumption, consumption patterns and consumption structure using micro data from the China Household Finance Survey. This paper finds that long household working hours have a negative impact on total household consumption for households headed by middle-aged, and change the household consumption patterns and increase the share of household online consumption in total household consumption. This result persists after the introduction of the 2.5-day weekly holiday system as an exogenous shock for identification and extensive robustness checks, mainly because for households the utility elasticity of leisure time is greater than that of offline consumption. Also, long household working hours change the household consumption structure, which is detrimental to household service-related consumption. This paper helps to understand time use and the trade-offs that Chinese households make between labor supply and consumption, and provides a reference for decision-making on public policies to comprehensively promote consumption and to optimize the consumption structure. JEL：D12 E21 J22