Efficient Intra-Household Allocation of Parental Leave
AbstractWe propose a model of how parents resolve conflicts about sharing the negative short and long-term consequences from parenthood-related career interruptions on earnings. We introduce childcare sharing in a collective model of household behavior with public consumption as in Blundell, Chiappori, and Meghier (2005). Conceptually, the solution to the household problem can be thought of as a two-stage process: Parents first agree on public expenditures on professional childcare; then, conditional on the level of public consumption and the budget constraint stemming from stage one, parents determine their individual job absence durations and private consumption shares. Using relative income measures from German parental benefit data as distribution factors, we find evidence for Pareto efficiency in childcare sharing. More precisely, households with higher total incomes purchase more professional childcare, and changes in distribution factors shift the conditional parental leave allocation in favor of the partner whose relative income increased.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5113.
Length: 46 pages
Date of creation: Aug 2010
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Find related papers by JEL classification:
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
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