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Wives’ Labor Supply and Taxation: a Conditional Preferences Approach

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  • Christophe Kolodziejczyk

    (Institute of Economics, University of Copenhagen)

Abstract

In the context of the unitary model of household labour supply we test whether the husband’s work is separable from consumption and the wife’s work. We apply a conditional preferences approach to derive a conditional labor supply function for the wife consistent with a unitary model with nonseparable preferences. Our main results are that consumption and wife’s work hours are not separable from the husband’s labour supply. Furthermore we find that the wife’s and husband’s work hours are complements when men tend to work longer hours than a typical full-time contract.

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File URL: http://www.econ.ku.dk/cam/wp0910/wp0406/2005-02.pdf/
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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2005-02.

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Length: 26 pages
Date of creation: Apr 2005
Date of revision:
Handle: RePEc:kud:kuieca:2005_02

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Keywords: conditional preferences; non-separability; income taxation; married women labor supply;

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References

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  1. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  2. Blundell, Richard & Duncan, Alan & Meghir, Costas, 1992. "Taxation in Empirical Labour Supply Models: Lone Mothers in the UK," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 102(411), pages 265-78, March.
  3. Richard Blundell & Alan Duncan & Costas Meghir, 1995. "Estimating labour supply responses using tax reforms," IFS Working Papers, Institute for Fiscal Studies W95/07, Institute for Fiscal Studies.
  4. Thomas Mroz, . "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," University of Chicago - Population Research Center, Chicago - Population Research Center 84-8, Chicago - Population Research Center.
  5. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, Econometric Society, vol. 54(3), pages 679-85, May.
  6. Gourieroux, Christian & Monfort, Alain & Renault, Eric & Trognon, Alain, 1987. "Generalised residuals," Journal of Econometrics, Elsevier, Elsevier, vol. 34(1-2), pages 5-32.
  7. Chesher, Andrew & Irish, Margaret, 1987. "Residual analysis in the grouped and censored normal linear model," Journal of Econometrics, Elsevier, Elsevier, vol. 34(1-2), pages 33-61.
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