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Bargaining Power in Marriage: Earnings, Wage Rates and Household Production

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Robert A. Pollak

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Abstract

What determines bargaining power in marriage? This paper argues that wage rates, not earnings, determine well-being at the threat point and, hence, determine bargaining power. Observed earnings at the bargaining equilibrium may differ from earnings at the threat point because hours allocated to market work at the bargaining solution may differ from hours allocated to market work at the threat point. In the divorce threat model, for example, a wife who does not work for pay while married might do so following a divorce; hence, her bargaining power would be related to her wage rate, not to her earnings while married. More generally, a spouse whose earnings are high because he or she chooses to allocate more hours to market work, and correspondingly less to household production and leisure, does not have more bargaining power. But a spouse whose earnings are high because of a high wage rate does have more bargaining power. Household production has received little attention in the family bargaining literature. The output of household production is analogous to earnings, and a spouse's productivity in household production is analogous to his or her wage rate. Thus, in a bargaining model with household production, a spouse's productivity in home production is a source of bargaining power.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11239.

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Date of creation: Apr 2005
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Handle: RePEc:nbr:nberwo:11239

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Find related papers by JEL classification:
D1 - Microeconomics - - Household Behavior
J1 - Labor and Demographic Economics - - Demographic Economics
J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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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. Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December. [Downloadable!]
  3. Kenneth J. Arrow, 1950. "A Difficulty in the Concept of Social Welfare," Journal of Political Economy, University of Chicago Press, vol. 58, pages 328. [Downloadable!] (restricted)
  4. Schultz, T.P., 1990. "Testing The Neoclassical Model Of Family Labor Supply And Fertility," Papers 601, Yale - Economic Growth Center.
  5. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April. [Downloadable!] (restricted)
  6. Konrad, K.A. & Lommerud, K.E., 2000. "The Bargaining Family Revisited," Norway; Department of Economics, University of Bergen 212, Department of Economics, University of Bergen.
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  7. Saku Aura, 2003. "Uncommitted Couples: Some Efficiency and Policy Implications of Marital Bargaining," Microeconomics 0304002, EconWPA. [Downloadable!]
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  8. Robert Pollak, 2003. "Gary Becker's Contributions to Family and Household Economics," Review of Economics of the Household, Springer, vol. 1(1), pages 111-141, January. [Downloadable!] (restricted)
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  9. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-18, May. [Downloadable!] (restricted)
  10. Jennifer Ward-Batts, 2003. "Out of the Wallet and into the Purse: Using Micro Data to Test Income Pooling," Claremont Colleges Working Papers 2003-10, Claremont Colleges. [Downloadable!]
  11. Shelly Lundberg & Robert A. Pollak, 2001. "Efficiency in Marriage," NBER Working Papers 8642, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
  13. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February. [Downloadable!] (restricted)
  14. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June. [Downloadable!] (restricted)
  15. Lundberg, Shelly & Pollak, Robert A, 1994. "Noncooperative Bargaining Models of Marriage," American Economic Review, American Economic Association, vol. 84(2), pages 132-37, May. [Downloadable!] (restricted)
  16. Lundberg, Shelly & Pollak, Robert A, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-58, Fall. [Downloadable!] (restricted)
  17. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January. [Downloadable!] (restricted)
  18. Lundberg, S.J. & Pollak, R.A. & Wales, T.J., 1994. "Do Husbands and Wives Pool Their Resources? Evidence from U.K. Child Benefit," Discussion Papers in Economics at the University of Washington 94-6, Department of Economics at the University of Washington.
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  19. Pollak, Robert A, 1988. "Tied Transfers and Paternalistic Preferences," American Economic Review, American Economic Association, vol. 78(2), pages 240-44, May. [Downloadable!] (restricted)
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(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. Chris van Klaveren & Bernard M.S. van Praag & Henriëtte Maassen van den Brink, 2005. "Empirical Estimation Results of a Collective Household Time Allocation Model," Tinbergen Institute Discussion Papers 05-096/3, Tinbergen Institute, revised 06 Apr 2006. [Downloadable!]
    Other versions:
  2. Anna Aizer, 2007. "Wages, Violence and Health in the Household," NBER Working Papers 13494, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Charlene M. Kalenkoski & David C. Ribar & Leslie S. Stratton, 2006. "The Influence of Wages on Parents’ Allocations of Time to Child Care and Market Work in the United Kingdom," IZA Discussion Papers 2436, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Chris van Klaveren & Bernard M.S. van Praag & Henriette Maassen van den Brink, 2008. "A Public Good Version of the Collective Household Model," Tinbergen Institute Discussion Papers 08-018/3, Tinbergen Institute. [Downloadable!]
  5. Daniel S. Hamermesh, 2006. "Time to Eat: Household Production under Increasing Income Inequality," IZA Discussion Papers 1965, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. van Klaveren, Chris / van Praag, Bernard M.S. / Maassen van den Brink, Henriette, 2008. "A Public Good Version of the Collective Household Model: An Empirical Approach with an Application to British Household Data," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
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