Answer:
Change in Policy: Reduction in weekly working days without changing the monthly wage.
We have to build a theoretical model to analyze the impact of this policy change on spouse's supply of labor.
Spouse's Labor Supply: Spouses have household duties so their labor supply is slightly different from the men's labor supply. As they have to manage both household responsibilities and their work front it's not only the wage that they receive, that affects their labor supply, but workplace safety, leisure time, etc. are also the key players in determining their work supply.
Labor-Lesuire Tradeoff: It is faced by wage-earning people decide the amount of time they want to spend on doing wage-earning activities (such as office work) and the satisfaction generating unpaid time, which allows participation in leisure activities and use of time in doing self-maintenance activities.
Now the policy change has reduced the weekly working days without changing the monthly wage. It means the working spouses will have more leisure time without losing income.
They can use this leisure time to fulfill their household duties. In other words, they will discharge their household duties more effectively and smoothly.
From the wage-supply relationship, we know with an increase in wages, there will be an increase in the supply of labor.
So, this policy change will ultimately cause the spouse's labor supply to increase. As they will receive the same wage with fewer working days.
Assumptions:
1. Both husband and wife are rational.
2. Spouses have the willingness to do the job.
3. Both partners are equally supporting each other in doing their household duties.
Step-by-step explanation:
Assumption 1 has been taken for the economic validity of the theory as no theory can be applied to irrational people.
Assumption 2 has been taken because nothing can lead a non-willing person to apply for a job.
Assumption 3 has been taken because it always has to discharge all the household duties alone and also to manage your work responsibilities together. And if the partner is not supportive this will have another impact. So to nullify this we have taken assumption 3.