Abstract
Several theoretical contributions have suggested to model household behavior as a Nash-bargaining game. Yet very few attempts have been made to operationalize cooperative models of labor supply for policy analysis. In this paper, we implement a Nash-bargaining model with external threat points (divorce) into the microsimulation of tax-benefit policy reforms in France. The observation of divorced individuals is used to predict outside options and (some) of the preferences for individuals living in couples. Benchmark simulations are conducted in a way that guarantees consistency with the Nash bargaining setting, regularity conditions and observed behavior. We examine how the labor supply of couples adjusts to shocks on threat points, either hypothetical or generated by a radical tax-benefit reform.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
