The changing intra-household resource allocation in Russia

Abstract

During the transition period, Russian workers witnessed important changes in their real earnings. In the process, the wage gap between men and women has varied wildly and the family decision-making process may have been significantly altered. To investigate this issue, we estimate a collective labour supply model using data from the RLMS. The specification allows the sharing rule to change in a discrete manner between the pre- and post-1998 financial crisis. Our results indicate that the parameters of the sharing-rule have shifted to a new equilibrium in the post-1998 period. Indeed, when their relative wage increases, husbands (wives) transfer relatively less (more) to their spouse than was previously the case.