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Children and non-participation in a model of collective household labor supply

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  • Jaime Andres Sarmiento Espinel

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    (El Colegio de México)

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    Abstract

    The collective model of household behavior is extended to consider the existence of public consumption, like expenditures on children, together with the possibility of non-participation in the labor market of one partner of the adult couple. This model argues that structural elements of the decision process, such as individual preferences and the intra-household distribution rule of non-public expenditure, can be identified by observing labor supply of each individual and total expenditures on the public good. The identification rests on the existence of a variable that affects household behavior only through its impact on the decision process, i.e. a distribution factor, and the existence and uniqueness of a reservation wage for each household member at which both members are indifferent to whether a member participates or not. This setting provides a conceptual framework for addressing issues related to the impact of the potential wage of a non-participating member on household allocations and the targeting of specific benefits or taxes.

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    File URL: http://cee.colmex.mx/documentos/documentos-de-trabajo/2012/dt201214.pdf
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    Bibliographic Info

    Paper provided by El Colegio de México, Centro de Estudios Económicos in its series Serie documentos de trabajo del Centro de Estudios Económicos with number 2012-14.

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    Date of creation: May 2012
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    Handle: RePEc:emx:ceedoc:2012-14

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    Web page: http://www.colmex.mx/centros/cee/
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    Keywords: collective household models; children; labor supply; non-participation;

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