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Labor Supply, Home Production and Welfare Comparisons

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Author Info
Olivier Donni

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Abstract

We consider the collective model of labor supply with marketable domestic production (Chiappori, 1997). We first show that, if domestic production is mistakenly ignored by the economist, welfare analyses will be probably distorted. Precisely, the identification of "collective" indirect utilities will be generally biased. The direction and the size of the bias depend on the complementarity/substituability of spouses' time inputs in the production process. The identification is unbiased if and only if the production function is additive. We then show that, even if domestic labor supplies are not observed by the economist, (i) market labor supplies have to satisfy testable restrictions, (ii) the structure of the model is partially identifiable so that valid welfare comparisons are still possible. Our identification results generalize Chiappori's (1992) ones.

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Paper provided by CIRPEE in its series Cahiers de recherche with number 0427.

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Date of creation: 2004
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Handle: RePEc:lvl:lacicr:0427

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Related research
Keywords: Household; Collective Model; Labor Supply; Home Production; Welfare Analysis; Identification;

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Find related papers by JEL classification:
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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References listed on IDEAS
Please 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.:
  1. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June. [Downloadable!] (restricted)
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  2. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April. [Downloadable!] (restricted)
  3. Helene Couprie, 2003. "Time allocation within the family: welfare implications of life in a couple," Labor and Demography 0312003, EconWPA. [Downloadable!]
  4. Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2007. "Collective Labour Supply: Heterogeneity and Non-Participation," Review of Economic Studies, Blackwell Publishing, vol. 74(2), pages 417-445, 04. [Downloadable!] (restricted)
    Other versions:
  5. Chiappori, Pierre-Andre, 1997. "Introducing Household Production in Collective Models of Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 191-209, February.
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  6. J. Taylor & Irma Adelman, 2003. "Agricultural Household Models: Genesis, Evolution, and Extensions," Review of Economics of the Household, Springer, vol. 1(1), pages 33-58, January. [Downloadable!] (restricted)
  7. Jeremy Lise & Shannon Seitz, 2004. "Consumption Inequality and Intra-Household Allocations," Working Papers 1019, Queen's University, Department of Economics. [Downloadable!]
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  8. Frederic Vermeulen, 2001. "And the winner is... An empirical evaluation of two competing approaches to household labour supply," Public Economics Working Paper Series ces0123, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics. [Downloadable!]
  9. Thomas Aronsson & Sven-Olov Daunfeldt & Magnus Wikström, 2001. "Estimating intrahousehold allocation in a collective model with household production," Journal of Population Economics, Springer, vol. 14(4), pages 569-584. [Downloadable!] (restricted)
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  10. Donni, Olivier, 2003. "Collective household labor supply: nonparticipation and income taxation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1179-1198, May. [Downloadable!] (restricted)
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  11. Richard Blundell & Pierre-André Chiappori & Costas Meghir, 2005. "Collective Labor Supply with Children," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1277-1306, December. [Downloadable!] (restricted)
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  12. Chiappori, Pierre-André & Fortin, Bernard & Lacroix, Guy, 2001. "Marriage Market, Divorce Legislation and Household Labor Supply," Cahiers de recherche 0103, Université Laval - Département d'économique. [Downloadable!]
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  13. Dr. Peter Kenning & Hilke Plassmann, 2004. "NeuroEconomics," Experimental 0412005, EconWPA. [Downloadable!]
  14. repec:rus:hseeco:101654 is not listed on IDEAS
  15. Apps, Patricia F & Rees, Ray, 1997. "Collective Labor Supply and Household Production," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 178-90, February.
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  16. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please 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.)

  1. Guy Lacroix & Natalia Radtchenko, 2008. "The Changing Intra-Household Resource Allocation in Russia," Cahiers de recherche 0811, CIRPEE. [Downloadable!]
    Other versions:
  2. Blundell, Richard William & Chiappori, Pierre-André & Magnac, Thierry & Meghir, Costas, 2005. "Collective Labour Supply: Heterogeneity and Non-Participation," CEPR Discussion Papers 5287, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Nicolas Moreau & Michal Myck & Javier Ruiz-Castill, 2006. "Does the Representation of Household Behavior Matter for Welfare Analysis of Tax-benefit Policies? An Introduction," Review of Economics of the Household, Springer, vol. 4(2), pages 99-111, 06. [Downloadable!] (restricted)
  4. Olivier Donni & Nicolas Moreau, 2005. "Collective Labor Supply: a Single-Equation Model and Some Evidence from French Data," Cahiers de recherche 0516, CIRPEE. [Downloadable!]
    Other versions:
  5. 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). [Downloadable!]
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