Collective Labor Supply Model Research Articles

Why gender norms matter

AbstractThis study examines the influence of gender norms on household behaviour and welfare. Using Japanese household data, we find that households with a conventional norm on gender roles spend more time on housework and less money on family‐common goods. To understand the underlying mechanism, we construct a collective labour supply model that explicitly introduces gender norms. We show that an inefficient ratio of wives' household time to that of husbands leads to an increase in the shadow price of domestic goods, through which the norm distorts the time and money allocated to home production and decreases household welfare.

Identification of unobserved distribution factors and preferences in the collective household model

This paper develops a non-parametric collective random utility model with a continuous choice of consumption and sharing. We allow for a heterogeneous population by introducing unobserved distribution factors and preferences that are non-separable in the stochastic household choice system. We provide necessary and sufficient conditions for invertibility with respect to the vector of unobserved heterogeneity. Further, we show non-parametric identification of each individual’s idiosyncratic preferences and Pareto weights from the distribution of observed choices. Based on this result we develop a non-parametric two-step estimation procedure and estimate individual counterfactuals in a collective labour supply model for households with children using the LISS panel.

Child Custody and Family Labour Supply: Evidence from the United States

AbstractThis paper investigates the impact of the joint child custody reforms on family labour supply in the United States between the 1970s and 1990s. Following the work of Chiappori et al. (Journal of Political Economy, 2002, 110 (1): 37–72), we propose a collective labour supply model in which the custody reforms play roles of a distribution factor that influences household bargaining power. In the empirical section, using data from the March Current Population Survey and Panel Study of Income Dynamics, we find a significantly positive influence of the legality on married women's labour supply and a negative influence on their husbands’. Checking robustness with different groups: non‐migrant couples, couples with children under 18, couples with children before the passage of the laws, couples married before the reforms and couples with non‐anti‐divorce religious preference, we find the results are consistent with those of the baseline model.

The impact of targeting policy on spouses’ demand for public goods, labor supplies and sharing rule

This paper studies the impact of targeted unconditional cash transfers on the spouses’ demand for public goods, labor supplies and sharing of resources. We estimate a collective labor supply model with distributional factors which is extended to include preferences over marketable public goods (including child goods). In this way, unlike previous research, we consider the impact of such transfers on the intrahousehold allocation of resources and distinguish between the labeling and recipient effects. We exploit the UK experience and find evidence in favor of the collective model with separable preferences over labor supplies and public goods. This finding implies a recipient effect and not a labeling effect of child benefits. Given the household’s unearned income, the bigger the wife’s bargaining power, the more the resources allocated to public goods (including child goods) and the wife’s private consumption. The results can be useful in the design of family policy which aims to improve the relative welfare of children within the family and alleviate any intrahousehold consumption inequalities.

Parenthood and the Gender Gap in Pay

We compare the income and wage trajectories of women to those of their male partners before and after parenthood. Focusing on the within-couple gap allows us to control for both observed and unobserved attributes of the spouse and to estimate both short- and long-term effects of entering parenthood. We find that 15 years after the first child has been born, the male-female gender gaps in income and wages have increased by 32 and 10 percentage points, respectively. In line with a collective labor supply model, the magnitude of these effects depends on counterfactual relative incomes or wages within the family.

Married with children: A collective labor supply model with detailed time use and intrahousehold expenditure information.

We propose a collective labor supply model with household production that generalizes a model of Blundell, Chiappori and Meghir (2005). Adults'preferences not only depend on own leisure and individual private consumption of market goods. They also depend on the consumption of domestic goods, which are produced by combining market goods with individuals'time. A new identification result, which uses production shifters, is developed. We apply our model to unique data on Dutch couples with children. Our application uses a novel estimation strategy that builds upon the familiar two-stage allocation representation of the collective model.

A collective labor supply model with complementarities in leisure: Identification and estimation by means of panel data

We present a novel identification strategy for a collective labor supply model that allows for complementarities in leisure (i.e., individuals may enjoy leisure more in company of their spouse). Individual preferences and the Pareto weights (which capture the intra-household bargaining process) are identified by making use of panel data with couples and individuals who became a widow(er) in the observation period, along with the assumption that an individual's preferences can only change in a particular manner after the spouse's death. The change in preferences comes from changes in observable variables that can be controlled for (like mental health) and from the loss of the possibility to jointly enjoy leisure after the couple's dissolution. We apply the model to American households coming from the first nine waves of the Health and Retirement Study (1992–2008) and show that complementarities in leisure are indeed important when modeling spouses' labor supply choices.

Economic models of the family and the relationship between economic status and health

Empirical evidence strongly suggests that there is a positive relationship between economic status and health, and that married persons are healthier than their single counterparts. There are, however, a number of economic explanations for why economic status is related to health in the family context that are often overlooked in empirical studies. This paper provides a comparative introduction to three main economic approaches to the family in order to understand further why married persons are often observed to be healthier than single persons. The models discussed are the unitary model, the collective labour supply model, and the institutional economics approach. In discussing the different approaches to health formation in a family context, issues pertaining to gender, intra-household inequality, and resource transfers are also explored to highlight the advantages of considering various economic perspectives. Each of these models, it is suggested, provides an alternative view of the mechanisms for relating economic status to health, and may thus affect the interpretation of empirical results.

Married With Children: A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information

We propose a collective labor supply model with household production that generalizes an original model of Blundell, Chiappori and Meghir (2005). In our model, adults' individual preferences do not only depend on own leisure and individual private consumption of market goods. They also depend on the consumption of domestic goods, which are produced by combining goods bought at the market with individuals' time. We apply our model to new and unique data on Dutch couples with children. The data contains detailed information about the spouses' time use and the intrahousehold allocation of all expenditures. Our application uses a novel estimation strategy that builds upon the familiar two-stage allocation representation of the collective model. We obtain interesting (and plausible) empirical results. Spousesﾒ preferences depend on the consumption of domestically produced goods (including children's welfare). Next, Pareto weights depend on variables like the individual wages and the share in the householdﾒs nonlabor income. Finally, and perhaps surprisingly, we do not find evidence that mothers care more for their children than fathers.

Married with Children: A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information

Married with Children: A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information

Married with Children: A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information

We propose a collective labor supply model with household production that generalizes an original model of Blundell, Chiappori and Meghir (2005). In our model, adults' individual preferences do not only depend on own leisure and individual private consumption of market goods. They also depend on the con- sumption of domestic goods, which are produced by combining goods bought at the market with individuals' time. We apply our model to new and unique data on Dutch couples with children. The data contains detailed information about the spouses' time use and the intrahousehold allocation of all expendi- tures. Our application uses a novel estimation strategy that builds upon the familiar two-stage allocation representation of the collective model. We obtain interesting (and plausible) empirical results. Spouses' preferences depend on the consumption of domestically produced goods (including children's welfare). Next, Pareto weights depend on variables like the individual wages and the share in the household’s nonlabor income. Finally, and perhaps surprisingly, we do not find evidence that mothers care more for their children than fathers.

The changing intra-household resource allocation in Russia

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.

Property Division Laws: The Effects on Labor Supply and Household Bargaining

This paper provides a framework for analyzing the impact of a change in property division law-a natural experiment that affects spouses' bargaining power in a discrete manner-on household decision making. I focus on the 2000 House of Lords decision (White v. White), which led to a more equitable division of assets between divorcing spouses in England and Wales, and estimate its effect on the intrahousehold resource allocation rule using the collective labor supply model. I show that this effect can be expressed as an equivalent transfer of household nonlabor income. The equivalent transfer concept is then used to demonstrate that the unobserved components of the underlying decision process (the individual preferences and the household resource sharing rule) can be identified nonparametrically from changes in observed labor supply. Empirical analysis using the British Household Panel Survey (BHPS)for 1991-2006 reveals that married women reduced their labor supply after the law change. I also find some evidence that the household resource allocation process changed in their favor.

The Changing Intra-Household Resource Allocation in Russia

During the transition toward a market economy, Russian workers have had to face important structural changes in the labour market as well as dramatic changes in their real earnings. In the process, the wage gap between men and women has varied wildly over that period. In recent years, young women have embraced professional careers, are more mobile on the labour market, and tend to delay the birth of their first child. All these trends are likely to influence intra-household relations and consequently the family decision process. To investigate this matter, we estimate a household collective labour supply model. We generalize the specification so as to allow the sharing rule to change in a discrete manner between the pre and post 1998 financial crisis periods. The parameters of the sharing-rule indicate that the households have shifted to a new equilibrium in the post-1998 period. Indeed, husbands have become more egotistic and wives more altruistic: An increase in their relative wage translates into a smaller/larger transfer to their spouse.

The Changing Intra-Household Resource Allocation in Russia

During the transition toward a market economy, Russian workers have had to face important structural changes in the labour market as well as dramatic changes in their real earnings. In the process, the wage gap between men and women has varied wildly over that period. In recent years, young women have embraced professional careers, are more mobile on the labour market, and tend to delay the birth of their first child. All these trends are likely to influence intra-household relations and consequently the family decision process. To investigate this matter, we estimate a household collective labour supply model. We generalize the specification so as to allow the sharing rule to change in a discrete manner between the pre and post 1998 financial crisis periods. The parameters of the sharing-rule indicate that the households have shifted to a new equilibrium in the post-1998 period. Indeed, husbands have become more egotistic and wives more altruistic: An increase in their relative wage translates into a smaller/larger transfer to their spouse.

Collective Labour Supply: Heterogeneity and Non-Participation

In this paper we extend the “collective” model of labour supply developed by Chiappori (1988) to allow for discrete choices, censoring and nonparticipation in employment. We derive the collective restrictions on labour supply functions that we contrast with restrictions implied by the usual “unitary” framework. We apply our results to the estimation of a collective labor supply model for married couples without children using UK data from 1979 to 1993. Taking into account unobserved heterogeneity, we use the log-linear labor supply framework. The implications of the unitary framework are rejected while those of the collective approach are not. The estimates of the sharing rule show that wages have a strong influence on bargaining power within couples.

Collective Labour Supply: Heterogeneity and Nonparticipation

We present identification and estimation results for the model of labour supply in which there are discrete choices, censoring of hours and nonparticipation in employment. We derive the collective restrictions on labour supply functions and contrast them with restrictions implied by the usual framework. Using the large changes in the wage structure between men and women in the UK over the last two decades we estimate a collective labor supply model for married couples without children. The implications of the unitary framework are rejected while those of the collective approach are not. The estimates of the sharing rule show that wages have a strong influence on bargaining power within couples.

Family Tax Splitting: A Microsimulation of its Potential Labour
 Supply and Intra-household Welfare Effects in Germany

This paper assesses the effects that an introduction of the French family splitting mechanism would have on German families' labour supply and intra-household consumption behaviour. We use simulated real world microdata created by means of a 'deterministic' collective labour supply model. The data are generated by a compound procedure of estimation and calibration based on GSOEP data. In a microsimulation the present tax-benefit system with child benefit/allowance is replaced by a tax scheme with family splitting. The resulting changes in labour supply are surprisingly small, even for women. Welfare effects are also modest, but differ for husbands and wives.

Marriage Market, Divorce Legislation, and Household Labor Supply

This paper provides a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply. In our approach, the sex ratio in the marriage market and the rules governing divorce are examples of “distribution factors.” These factors are defined as variables that affect the household members’ bargaining position but not preferences or the joint budget set. We extend the collective labor supply model developed by Chiappori to allow for distribution factors. We show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intrahousehold decision process. The model is estimated using PSID data for the year 1988. Our results do not reject the restrictions imposed by the model. Also, the sex ratio and divorce laws deemed favorable to women are found to affect labor supply behavior and the decision process in the directions predicted by the theory and to have sizable effects.

Une application d'un modèle collectif d'offre de travail sur données françaises

An Application of a Collective Labour Supply Model to French Data by Nicolas Moreau This paper estimates the Chiappori et alii ( 1 998) collective labour supply model using recent French data. The data only partially validate the model. Nevertheless, the estimates provide information on arrangements made within couples. When a wife's "divorce" threat is credible, she receives a larger share of the household's income from financial and real estate investments.