ABSTRACT
This chapter reconstructs the basic model of labour supply on the assumption that the decision-making unit is the household. It analyses interdependence between the labour supplies of different workers, and introduces secondary workers and domestic activities. The chapter provides an appropriate platform upon which to develop life-cycle models of labour supply decision making. In practice labour supply decisions are often taken not by individuals, as the basic model assumes, but by households. The labour supply decision of married women is of particular interest to labour economists, for any future growth in total labour supply to the market place is likely to come primarily from increased participation and hours of married women. The basic model of individual labour supply is timeless. It therefore implicitly assumes that the individual faces the same wage offer and has the same preferences across goods and leisure throughout his lifetime. Once the optimal labour supply is determined it remains constant through time.
