Modes of Spousal Interaction and the Labor Market Environment
Abstract
We formulate a model of household behavior in which cooperation is costly and in which these costs vary across households. Some households rationally decide to behave noncooperatively, which in our context is an efficient outcome. An intriguing feature of the model is that, while the welfare of the spouses is continuous in the state variables, labor supply decisions are not. Small changes in state variables may result in large changes in labor supplies when the household switches its mode of behavior. We estimate the model using a nationally representative sample of Italian households and find that the costly cooperation model significantly outperforms a noncooperative model. This suggests the possibility of attaining large gains in aggregate labor supply by adopting policies which promote cooperative household behavior.Download Info
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2005.Length: 40 pages
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2005
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Related research
Keywords: household time allocation; Nash bargaining; Nash equilibrium; maximum likelihood;Other versions of this item:
- Daniela Del Boca & Christopher J. Flinn, 2004. "Modes of Spousal Interaction and the Labor Market Environment," CHILD Working Papers wp12_05, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Daniela Del Boca & Christopher J. Flinn, 2006. "Modes of Spousal Interaction and the Labor Market Environment," Carlo Alberto Notebooks 14, Collegio Carlo Alberto.
- C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
- D19 - Microeconomics - - Household Behavior - - - Other
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-18 (All new papers)
- NEP-LTV-2006-03-18 (Unemployment, Inequality & Poverty)
References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Zvi Eckstein & Osnat Lifshitz, 2011.
"Dynamic Female Labor Supply,"
Econometrica,
Econometric Society, vol. 79(6), pages 1675-1726, November.
- Zvi Eckstein, 2010. "Dynamic Female Labor Supply," 2010 Meeting Papers 223, Society for Economic Dynamics.
- Eckstein, Zvi & Lifshitz, Osnat, 2009. "Dynamic Female Labor Supply," CEPR Discussion Papers 7548, C.E.P.R. Discussion Papers.
- Eckstein, Zvi & Lifshitz, Osnat, 2009. "Dynamic Female Labor Supply," IZA Discussion Papers 4550, Institute for the Study of Labor (IZA).
- Alessandro Cigno, 2011.
"The economics of marriage,"
CHILD Working Papers
wp02_11, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Alessandro Cigno, 2011. "The Economics of Marriage," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 28-41, 05.
- Alessandro Cigno, 2011. "The Economics of Marriage," Working Paper Series 11_11, The Rimini Centre for Economic Analysis.
- Bargain, Olivier & Moreau, Nicolas, 2005. "Cooperative Models in Action: Simulation of a Nash-Bargaining Model of Household Labor Supply with Taxation," IZA Discussion Papers 1480, Institute for the Study of Labor (IZA).
- Daniela Del Boca & Christopher J. Flinn, 2005.
"Household Time Allocation and Models of Behavior: A Theory of Sorts,"
Carlo Alberto Notebooks
8, Collegio Carlo Alberto, revised 2006.
- Daniela Del Boca & Christopher J. Flinn, 2005. "Household Time Allocation and Modes of Behavior: A Theory of Sorts," CHILD Working Papers wp15_05, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Del Boca, Daniela & Flinn, Christopher, 2005. "Household Time Allocation and Modes of Behavior: A Theory of Sorts," IZA Discussion Papers 1821, Institute for the Study of Labor (IZA).
- Antonio Romero Medina & Mateo Triossi, 2007.
"Games of capacities : a (close) look to Nash Equilibria,"
Economics Working Papers
we075933, Universidad Carlos III, Departamento de Economía.
- Romero-Medina, Antonio & Triossi, Matteo, . "Games of capacities : a (close) look to Nash Equilibria," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/929, Universidad Carlos III de Madrid.
- Antonio Romero-Medina & Matteo Triossi, 2007. "Games of Capacities: A (Close) Look to Nash Equilibria," Carlo Alberto Notebooks 52, Collegio Carlo Alberto.
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