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Family Bargaining and Welfare

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  • Luis Rubalcava
  • Duncan Thomas

Abstract

Recent research on household behavior suggests that, ceteris paribus, a woman's "power" within a household influences consumption and time allocation choices. From an empirical point of view, a central stumbling block in this line of inquiry has been identification of sources of "power" that can plausibly be treated as exogenous. Aid to Families with Dependent Children, AFDC, was paid only to single women with children. The benefit level provides a natural fall-back for a low-income woman with children who is contemplating separation from her partner. As AFDC payments increase, separation will become more attractive and, the authors conjecture, the relative bargaining power of the woman in a household should also increase. If this is true, and if bargaining power does affect allocation decisions within the household, then the AFDC benefit level should affect household choices in intact families. This hypothesis is tested using the Panel Study of Income Data from 1968 through 1992.

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Bibliographic Info

Paper provided by RAND Corporation Publications Department in its series Working Papers with number 00-10.

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Length: 36 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:ran:wpaper:00-10

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Keywords: FAMILY ; WOMEN ; BARGAINING ; DECISION MAKING ; SOCIAL WELFARE;

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  1. Hilary Williamson Hoynes, 1995. "Does Welfare Play Any Role in Female Headship Decisions?," NBER Working Papers 5149, National Bureau of Economic Research, Inc.
  2. Martin Browning & P.A. Chiappori, 1996. "Efficient Intra-Household Allocations - A General Characterization and Empirical Tests," Discussion Papers 96-10, University of Copenhagen. Department of Economics.
  3. Schultz, T.P., 1990. "Testing The Neoclassical Model Of Family Labor Supply And Fertility," Papers 601, Yale - Economic Growth Center.
  4. Bergstrom, Theodore C., 1993. "A survey of theories of the family," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 2, pages 21-79 Elsevier.
  5. Duncan Thomas, 1990. "Intra-Household Resource Allocation: An Inferential Approach," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 635-664.
  6. Jonathan Gruber, 1996. "Cash Welfare as a Consumption Smoothing Mechanism for Single Mothers," NBER Working Papers 5738, National Bureau of Economic Research, Inc.
  7. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  8. Shelly J. Lundberg & Robert A. Pollak & Terence J. Wales, 1997. "Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 463-480.
  9. Marjorie B. McElroy, 1990. "The Empirical Content of Nash-Bargained Household Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 559-583.
  10. 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.
  11. R. A. Moffitt & R. Reville & A. E. Winkler, . "State AFDC rules regarding the treatment of cohabitors: 1993," Institute for Research on Poverty Discussion Papers 1058-95, University of Wisconsin Institute for Research on Poverty.
  12. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
  13. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
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  15. Browning, M. & Bourguignon, F. & Chiappori, P.A. & Lechene, V., 1992. "Incomes and Outcomes: A structural Model of Intra-Household Allocation," DELTA Working Papers 92-23, DELTA (Ecole normale supérieure).
  16. 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.
  17. Bourguignon, Francois & Chiappori, Pierre-Andre, 1992. "Collective models of household behavior : An introduction," European Economic Review, Elsevier, vol. 36(2-3), pages 355-364, April.
  18. Duncan Thomas, 1994. "Like Father, like Son; Like Mother, like Daughter: Parental Resources and Child Height," Journal of Human Resources, University of Wisconsin Press, vol. 29(4), pages 950-988.
  19. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
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  21. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
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