How does Congestion-Induced Commuting Time affect a Worker’s Time Allocation between Labour and Leisure?

The paper builds on a simple theoretical framework to investigate the issue of congestion as a factor influencing individual workers in terms of time allocation between work and leisure. The commuting time is taken into consideration as a fixed time endowment as part of the model, where congestion is introduced as a limitation to the available time. In this context, the optimum level of labour supply and leisure is obtained as a function of the effective available time, which is the total time minus commuting. The findings indicate a negative congestion effect, which means that the more the congestion, the fewer the hours worked and leisure, which consequently decreases income and utility. This result applies most directly to workers with flexible hours. For those on fixed contracts, congestion does not reduce hours worked; it reduces leisure time and lowers the effective wage when commuting time is factored in. Comparative statics also exhibit that even though preferences dictate how much time is allocated to work and leisure, congestion limits the amount of time that can be allocated. This model thus emphasises congestion as a binding time constraint in the model, where it gives a behavioural interpretation of the costs of congestion. The findings provide an addition to the literature by providing a worker-centred view that congestion is directly linked to time allocation decisions and economic outcomes.