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Labor Supply, Home Production and Welfare Comparisons

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  • Donni, Olivier

    ()
    (University of Cergy-Pontoise)

Abstract

We consider the collective model of labor supply with marketable domestic production. We first show that, if domestic production is mistakenly ignored, the “collective” indirect utilities that are retrieved from observed behavior will be unbiased if and only if the profit function is additive. Otherwise, in the non-additive case, the direction and the size of the bias will depend on the complementarity/substitutability of spouses’ time inputs in the production process. We then show that, even if domestic labor supplies are not observed, valid welfare comparisons are possible. This identification result generalizes that in Chiappori (1992).

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1511.

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Length: 30 pages
Date of creation: Mar 2005
Date of revision:
Publication status: published in: Journal of Public Economics, 2007, 92 (7), 1720-1737
Handle: RePEc:iza:izadps:dp1511

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Keywords: collective model; labor supply; home production; household; welfare analysis; identification;

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References

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  1. Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2002. "Collective Labor Supply: Heterogeneity and Nonparticipation," Research Unit Working Papers, Laboratoire d'Economie Appliquee, INRA 0210, Laboratoire d'Economie Appliquee, INRA.
  2. Jeremy Lise & Shannon Seitz, 2011. "Consumption Inequality and Intra-household Allocations," Review of Economic Studies, Oxford University Press, vol. 78(1), pages 328-355.
  3. Olivier Donni, 2001. "Collective Female Labor Supply: Theory and Application," Cahiers de recherche CREFE / CREFE Working Papers, CREFE, Université du Québec à Montréal 141, CREFE, Université du Québec à Montréal.
  4. Yuk-Fai, Fong & Junsen, Zhang, 1998. "The Identification of Unobservable Independent and Spousal Leisure," Departmental Working Papers, Chinese University of Hong Kong, Department of Economics _093, Chinese University of Hong Kong, Department of Economics.
  5. Apps, P. F. & Rees, R., 1996. "Labour supply, household production and intra-family welfare distribution," Journal of Public Economics, Elsevier, Elsevier, vol. 60(2), pages 199-219, May.
  6. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, Econometric Society, vol. 56(1), pages 63-90, January.
  7. Aronsson, Thomas & Daunfeldt, Sven-Olov & Wikström, Magnus, 1999. "Estimating Intrahousehold Allocation in a Collective Model With Household Production," Umeå Economic Studies 495, Umeå University, Department of Economics.
  8. Andrew Clark & Hélène Couprie & Catherine Sofer, 2004. "La modélisation collective de l'offre de travail. Mise en perspective et application aux données britanniques," Revue économique, Presses de Sciences-Po, Presses de Sciences-Po, vol. 55(4), pages 767-789.
  9. Chiappori, Pierre-André & Fortin, Bernard & Lacroix, Guy, 2001. "Marriage Market, Divorce Legislation and Household Labor Supply," Cahiers de recherche, Université Laval - Département d'économique 0103, Université Laval - Département d'économique.
  10. Frederic Vermeulen, 2001. "And the winner is... An empirical evaluation of two competing approaches to household labour supply," Public Economics Working Paper Series, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics ces0123, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
  11. Chiappori, P.A., 1994. "Introducing Household Production in Collective Models of Labour Suply," DELTA Working Papers, DELTA (Ecole normale supérieure) 94-18, DELTA (Ecole normale supérieure).
  12. Apps, Patricia F & Rees, Ray, 1997. "Collective Labor Supply and Household Production," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(1), pages 178-90, February.
  13. Olivier Donni & Nicolas Moreau, 2005. "Collective Labor Supply: a Single-Equation Model and Some Evidence from French Data," Cahiers de recherche, CIRPEE 0516, CIRPEE.
  14. Juster, F. Thomas & Stafford, Frank P., 1990. "The Allocation of Time: Empirical Findings, Behavioural Models, and Problems of Measurement," Working Paper Series, Research Institute of Industrial Economics 258, Research Institute of Industrial Economics.
  15. Olivier Donni, 2001. "Collective Household Labor Supply: Nonparticipation and Income Taxation," Cahiers de recherche CREFE / CREFE Working Papers, CREFE, Université du Québec à Montréal 140, CREFE, Université du Québec à Montréal.
  16. J. Taylor & Irma Adelman, 2003. "Agricultural Household Models: Genesis, Evolution, and Extensions," Review of Economics of the Household, Springer, Springer, vol. 1(1), pages 33-58, January.
  17. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(3), pages 437-67, June.
  18. Hélène Couprie, 2007. "Time allocation within the Family: Welfare implications of life in a couple," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 117(516), pages 287-305, 01.
  19. Graham, John W & Green, Carole A, 1984. "Estimating the Parameters of a Household Production Function with Joint Products," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 277-82, May.
  20. Rees, Ray, 1988. "Taxation and the Household," Munich Reprints in Economics, University of Munich, Department of Economics 3411, University of Munich, Department of Economics.
  21. Richard Blundell & Pierre-Andr� Chiappori & Costas Meghir, 2005. "Collective Labor Supply with Children," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 113(6), pages 1277-1306, December.
  22. Eric J. Solberg & David C. Wong, 1992. "Family Time Use: Leisure, Home Production, Market Work, and Work Related Travel," Journal of Human Resources, University of Wisconsin Press, vol. 27(3), pages 485-510.
  23. Gronau, Reuben, 1977. "Leisure, Home Production, and Work-The Theory of the Allocation of Time Revisited," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 85(6), pages 1099-1123, December.
  24. repec:rus:hseeco:101654 is not listed on IDEAS
  25. Olivier Donni, 2006. "Choix collectifs des heures travaillées, consommation publique et équilibre de Lindahl," Cahiers de recherche, CIRPEE 0621, CIRPEE.
  26. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, Elsevier, vol. 35(3), pages 355-369, April.
  27. B. F. Kiker & M. Mendes de Oliveira, 1992. "Optimal Allocation of Time and Estimation of Market Wage Functions," Journal of Human Resources, University of Wisconsin Press, vol. 27(3), pages 445-471.
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