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Specialization in the bargaining family

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  • Raphaela Hyee
  • Julio R. Robledo

Abstract

We develop a two period family decision making model in which spouses bargain over their contributions to a family public good and the distribution of private consumption. In contrast to most models in the literature, specialization within the couple emerges endogenously from the production of the public good, and is not caused by exogenous differences between the spouses. Increasing marginal benefits of labour market experience make specialization efficient, even if both spouses have equal market and household productivities on the outset. If spouses are not able to enter into a binding contract governing the distribution of private consumption in the second period, the spouse specialized in market labour cannot commit to compensate the other spouse for foregone investments in earnings power. As a consequence, this spouse may withdraw part of his/her contribution and the provision level of the household good is likely to be inefficiently low.

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Bibliographic Info

Paper provided by University of Nottingham, School of Economics in its series Discussion Papers with number 10/06.

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Handle: RePEc:not:notecp:10/06

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Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
Phone: (44) 0115 951 5620
Fax: (0115) 951 4159
Web page: http://www.nottingham.ac.uk/economics/
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Related research

Keywords: Family bargaining; specialization; private provision of public goods;

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  1. Vagstad, S., 2001. "On Private Incentives to Aquire Household Production Skills," Norway; Department of Economics, University of Bergen 221, Department of Economics, University of Bergen.
  2. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, November.
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Cited by:
  1. Alexander Kemnitz & Marcel Thum, 2012. "Gender Power, Fertility, and Family Policy," CESifo Working Paper Series 3798, CESifo Group Munich.

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