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Collective Labour Supply: Heterogeneity and Nonparticipation

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Author Info

  • Blundell, Richard

    ()
    (University College London)

  • Chiappori, Pierre-André

    ()
    (Columbia University)

  • Magnac, Thierry

    ()
    (University of Toulouse I)

  • Meghir, Costas

    ()
    (Yale University)

Abstract

We present identification and estimation results for the "collective" 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 "unitary" 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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1785.

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Length: 58 pages
Date of creation: Sep 2005
Date of revision:
Publication status: published in: Review of Economic Studies, 2007, 74 (2), 417-445
Handle: RePEc:iza:izadps:dp1785

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Keywords: collective models; labor supply;

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