Unitary Household Model Research Articles

Charitable Giving in Married Couples: Untangling the Effects of Education and Income on Spouses’ Giving

This research note looks beyond the unitary household model and analyzes the influence of household resources by gender on charitable giving. We investigate the intrahousehold variables of income and education and their effects on giving behaviors in married couples. We use data from the longitudinal Philanthropy Panel Study (2005–2017) to examine how spouses’ income and educational differences affect charitable giving behaviors and introduce fixed effects to control for unobserved heterogeneity. Initially, we find a positive relationship between both the husband’s and wife’s earned and unearned incomes and the likelihood and amount of giving by married couples. However, when fixed effects are used, we find women’s earned income to be significantly associated with all forms of giving, showing that women’s labor market earnings disproportionately influence giving behavior. Education is less of a factor in whether couples give and influences giving only when the husband has more education than the wife.

Effects of School Closure on Household Labor Supply: Evidence from Rural China

This paper studies the effects of school closure on household labor supply exploiting China’s large-scale rural primary school closing during the early 2000s. Using the CHNS 1991-2006 and CHIP 2007-2008 datasets and a difference-in-differences approach, we find that school closure increases female total annual income by nearly 40 percent, which comes from increases in wage income. We further show that the significant positive impacts on female income are attributable to their migration responses: females tend to engage in temporary rural-urban migration to care for children following school closure. We find no effects on male income and migration decisions. Our findings support the unitary model of household.

The effect of inheritance receipt on individual labor supply: Evidence from Japanese microdata

This paper examines the effects of wealth on individual labor supply by considering inheritance receipts as an exogenous change in household wealth. Using Japanese microdata consisting of individuals aged 26–51, we find that (i) while men’s probability of working does not respond to inheritance receipt, women’s probability of working decreases; and (ii) in the case of most respondents the receipt of an inheritance seems to be unanticipated. We also test the unitary household model using information on respondents’ spouses. The results indicate that who received an inheritance influences the labor supply decision of each household member, meaning that we find no support for the unitary model.

Intra-household bargaining for school trip accompaniment of children: A group decision approach

This paper tests a group decision-making model to examine the school travel behavior of students 6–18years old in the Minneapolis-St. Paul Metropolitan area. The school trip information of 1737 two-parent families with a student is extracted from Travel Behavior Inventory data collected by the Metropolitan Council between the Fall 2010 and Spring 2012. The model has four distinct characteristics including: (1) considering the student explicitly in the model, (2) allowing for bargaining or negotiation within households, (3) quantifying the intra-household interaction among family members, and (4) determining the decision weight function for household members. This framework also covers a household with three members, namely, a father, a mother, and a student, and unlike other studies it is not limited to dual-worker families. To test the hypotheses we build two models, each with and without the group-decision approach. The models are separately built for different age groups, namely students 6–12 and 12–18years old. This study considers a wide range of variables such as work status of parents, age and gender of students, mode of travel, and distance to school. The findings of this study demonstrate that the elasticities of the two modeling approaches differ not only in the value, but in the sign in some cases. In 63% of the cases the unitary household model underestimates the results. More precisely, the elasticities of the unitary household model are as much as 2 times more than that of the group-decision model in 20% of cases. This is a direct consequence of model misspecification that misleads both long- and short-term policies where the intra-household bargaining and interaction is overlooked in travel behavior models.

A note on the ‘food paradox’: some contradictory evidence

A sample of 200 households in one New York City neighborhood in 1904 shows constant per capita food consumption as households grow in size, holding constant per capita expenditure. Logan (Econ Inq 49(4):1008–1028, 2011) presents US historical evidence that per capita food consumption declines as households grow, replicating contemporary cross-national evidence reported by Deaton and Paxson (J Political Econ 106(5):897–930, 1998), which they describe as a ‘paradox’. Possible reasons for the contradictory evidence include minimal price variation within a city, greater homogeneity of household units, more being spend on rent leading to greater benefits of sharing living space, and application of the unitary household model to a more appropriate setting. Time series estimates of US price and income elasticity of food demand show constant or increasing per capita consumption, which also contradicts the received literature.

Intrahousehold Allocation and Bargaining Power: Evidence from Chile

Until 1999, children born out of wedlock in Chile had fewer child support rights than those born to married couples. I interpret a change in this law as an increase in the household bargaining power of women in cohabiting relationships. Using a panel of cross-sectional data, I find a decrease of 1.8 percentage points in the probability of working among men and an increase of 1.2 percentage points in school attendance of children under 19. These results provide evidence that contradicts the predictions of the unitary household model as well as the Nash bargaining model. The labor market outcomes support a model in which a reduction in men’s relative bargaining power is understood as a tax on their wages.

Coexistence of surplus labor and the Lewis turning point in China: a unitary household decision-making model study

This paper discusses the underlying relationship between surplus labor and the Lewis turning point in the duration of rapid economic growth in China. An agent-based model was proposed for studying the Lewis turning point and labor resource allocation, in which the decision-making interactions were made among the members of a household. This model differs from traditional development economics theory in which only an individual’s behavior is considered. How peasant households allocate their human capital to maximize the utility of a household unit was investigated on the basis of the unitary principle under the assumption of risk aversion. The roles of living expenses, subsidies and income adjustment factors were also considered. Our results revealed the paradoxical phenomenon that rural surplus labor and the Lewis turning point coexist.

Income, Gender, and Consumption: A Study of Malawian Households

This paper uses 1998 household level data from urban Malawi to look at the impact on consumption patterns of the share of total household income accruing to different individuals within the household. Specifically, male and female income shares and other factors which may influence intra-household bargaining such as education are analyzed. The study finds that for some categories of good such as personal and household hygiene and clothing, unitary household models are unsuitable as intra-household relationships and differing preferences of individuals play a key role in consumption choices. Overall the results indicate that females favor household hygiene, vehicle repair and girls. clothing while males favor male clothing. Consumption choices are influenced by both the income and education of the main male and female members, and crucially, the impact of income shares on household consumption is non-linear.

Are Women More Credit Constrained? Experimental Evidence on Gender and Microenterprise Returns

We report on a field experiment providing random grants to microenterprise owners. The grants generated large profit increases for male owners but not for female owners. We show that the gender gap does not simply mask differences in ability, risk aversion, entrepreneurial attitudes, or differences in reporting behavior, but there is some evidence that the gender gap is larger in female-dominated industries. The data are not consistent with a unitary household model, and imply an inefficiency of resource allocation within households. We show evidence that this inefficiency is reduced in more cooperative households. (JEL D13, D14, J16, L25, L26, O12, O16)

Out of the Wallet and into the Purse: Using Micro Data to Test Income Pooling

This paper uses an exogenous change in the intrahousehold distribution of income, provided by a change in United Kingdom Family Allowance policy to test the income-pooling hypothesis implied by unitary household models. Expenditure shares are estimated for a wide range of goods using household-level data. Shifts in expenditure shares suggest that children and mothers benefited at the expense of fathers when this policy change shifted income within households from men to women. Similar shifts are not found among married-couple households with no children. This paper refutes income pooling, and confirms and extends results in Lundberg, Pollak, and Wales (1997).

Marriage Market, Parents’ Bargaining Powers, and Children's Nutrition and Education*

AbstractTest of resource pooling and test of effect of sex ratio in the marriage market on intrahousehold resource allocation are combined to test the unitary household model. The consistency condition between the two tests is derived to test the Nash household bargaining and Pareto‐efficient household models. I examine intrahousehold resource allocation to children's nutrition and education in Indonesia. For children's nutrition, the unitary household model is rejected in favour of the non‐unitary models. The results for investment in education are mixed. The decision‐making process may differ depending on the type of decision being made.

Price policy, poverty, and power within rural West African households

This paper explores the impact of agricultural price policy on poverty in West Africa, a region in which prices are an important tool for raising rural household incomes. A game-theoretic, collective model of household income generation and resource allocation is developed that incorporates three features typical of West African rural households: preference heterogeneity among women and men, individual resource control, and power-mediated bargaining over resource control in the face of changes in households' economic environments. To explore price effects, the model is used to simulate the income impacts of large increases in cotton prices accompanying fast-paced agricultural liberalisation in Burkina Faso in the 1980s. The paper shows that where resources are controlled individually by household members, rather than pooled, Pareto efficiency in income generation does not hold. The impact of agricultural price policy on poverty is mediated by bargaining over resource control within households. Both the relative bargaining power of women and men and the degree of preference heterogeneity between them play fundamental roles in the outcome of such bargaining. The results point to a lower ability of households to take advantage of price incentives and thereby raise their incomes than a unitary household model, in which preferences do not differ and resources are pooled, predicts. They suggest that the effectiveness of price policy in reducing poverty in the region would be enhanced by taking into account the incentive structure within households as well as individual household members' ability to bargain over the benefit and cost streams flowing from price changes.

Intra‑ household Differences in Education and Home Leaving in Indonesia

This paper investigates some of the underlying factors determining the probability of household division, defined here as the event when an adult leaves his or her original household, utilizing data from two waves of the IFLS (IFLS1-1993 and IFLS3-2000). Borrowing the empirical framework suggested by Foster and Rosenzweig (2002), I estimate the probability of household division by the subsequent waves of the survey, using household variables from an earlier wave as the explanatory variables. The findings suggest that education variables play an important albeit limited role in determining household division. There is evidence that higher education of the household head is associated with lower propensity of an adult household member to leave. On the other hand, higher maximum years of schooling of other members in the household are associated with higher probability of household division. These results, along with the finding showing that rural households are more likely to divide, indicate that household division in Indonesia may largely be associated with the mobility of young, more educated members from rural areas. While the empirical framework is based on a collective household model, the results can also be explained within the context of unitary household model.

Observable and Unobservable Household Sharing Rules: Evidence from Young Couples' Pocket Money

The leading evidence against the unitary household models is that who gets what is significantly dependent upon who earns how much. However, it is difficult to pin down the causal effect of relative earnings on intra-household resource allocation because households jointly decide both labor supply and consumption. I utilize longitudinal data to analyze the spouse's individual budgets - pocket money. This unique data set allows for the specification of the simultaneous process of household decision-making in a fully stochastic fashion. By doing this, it is possible to differentiate unobserved spousal bargaining power from heterogeneity at the household level. The results imply that the balance of power between spouses is stable over time and robust to transitory changes in relative earnings. Public policies targeting the disadvantaged within households should be designed and implemented on the long-term basis.

A structural econometric model of family valuation and choice of employer-sponsored health insurance in the United States.

This paper estimates a fully structural unitary household model of employment and health insurance decisions for dual wage-earner families with children in the United States, using data from the 1987 National Medical Expenditure Survey. Families choose hours of work and the breakdown of compensation between cash wages and health insurance benefits for each wage earner in order to maximize expected utility under uncertain need for medical care. Heterogeneous demand for the employer-sponsored health insurance is thus generated directly from variations in health status and earning potential. The paper concludes by discussing the benefits of using structural models for simulating welfare effects of insurance reform relative to the costly assumptions that must be imposed for identification.

Tests of Income Pooling on Household Budget Data: The Australian Evidence

The unitary household model implies pooling of all individual incomes. This study distinguishes between various types of income pooling and tests them on Australian household income/expenditure data. The tests recognise the endogeneity of both earned and unearned income and are performed using a 3 SLS estimation procedure that allows feedback between the various equations. The results support income pooling for some items, though not for others. Moreover, income pooling across gender seems much less likely for old people than for the younger individuals. The study, also, provides evidence on the interaction between the various types of income.

Wages for Wives: Renegotiating Gender and Production Relations in Contract Farming in the Dominican Republic

This study analyzes the intersection of gender and production relations in small-scale contracting in nontraditional agriculture. The case of the processing tomato industry in the Dominican Republic exemplifies patterns found throughout the region. Building on a critique of unitary household models, I analyze the gendered relations mobilizing resources for contract farming. As appears common, contracting has heightened demand for women's farm labor. Contracting has simultaneously provided women with openings for contesting the appropriation of their unpaid labor and many women are claiming payment for work in contract farming. This case demonstrates the importance of gender issues in informing contract farming debates and policy interventions.

Intra-Household Resource Allocation and Their Impact on Expenditure Patterns: Comparative Evidence from South Africa and Pakistan

This paper tests, using data from South Africa and Pakistan, two major implications of the unitary household model, namely, that (a) each individual pools the various components of her/his non-labour earnings, and (b) men and women pool their non-labour earnings between themselves. The study uses a three-stage least squares procedure that, besides recognising the endogeneity of all the income variables, allows for simultaneity between all the income and expenditure equations. The study finds that men and women are much less likely to pool their transfer receipts than other types of income. This paper, also, investigates the crowding out of private transfers by public transfers in both countries. While it finds no crowding out in Pakistan, it reports strong evidence of such crowding out in South Africa in 1993/94 and that too for the poor but not the non-poor households. However, the negative impact of social pensions on private transfers in South Africa seems to have weakened over 1993-98. This study also finds that in 1993/94, though not in 1998, social pensions had a negative impact on earned income of members, especially of females, in the household. The social pensions scheme in South Africa, as prevailing in 1993/94, was not as generous towards black households or as redistributive towards the poor as commonly believed. However, the pensions scheme seems to have changed in both these respects over 1993-98.

The impact of changes in common property resource management on intrahousehold allocation

In developing countries, common property resources (CPRs) can be an important source of income for certain individuals within households. This paper demonstrates that if changes in the management of CPRs impose fixed costs on them, or cause a decline in the prices of goods produced from it, the intrahousehold allocation of resources may alter in a manner detrimental to those individuals. The paper also shows that the assumption of a unitary household model causes the detrimental effects of certain CPR policy interventions to be overlooked. Although the model is narrowly conceived, the results can be generalised to examples where households have members who specialise in different economic activities outside the home.

Gains féminins, allocation des biens et statut nutritionnel des enfants au Burkina Faso

Women's Income, Good Allocation and Nutritional Status of Children in Burkina Faso The objective of the present study is to provide an econometric test to the relative validity of collective and unitary household behavior models, with the help of data of the 1994-1995 Burkina Faso household survey. Obtained results seem to justify conclusions of noncooperative approach where the well-being of the group is partly function of the identity of the income earner. On the one hand, the estimation of demand functions indicates that the share of wives income influences significantly, positively food expenses and energy, and negatively expenses to cigarettes, tobacco and moving of household. On the other hand, reduced nutrition equations suggest that, all others things being equal, more the share of woman income of household grows, more the probability of malnutrition of children of less of 60 month decreases. But, the coefficients of malnutrition appear statistically different according to the gender, and suggest an differential effect to the advantage of boys inherent to the share of wives income. Considerations of equity, efficiency and the adherence to rules of the game of the traditional society institutions could justify this situation. Results of the present research have economic policy implications, to the extent of the modification of intra-household distribution of income is a means to increase food expenses, to reduce relative expenses to the tobacco and to raise the nutritional status of children.