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And the winner is... An empirical evaluation of two competing approaches to household labour supply

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Author Info
Frederic Vermeulen ()

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Abstract

In this paper, an empirical evaluation is presented of two competing flexible labour supply models. The first is a standard unitary model, while the second is based on the collective approach to household behaviour. The evaluation focuses on the testing of the models' theoretical implications, on their ability to identify structural information, like preferences and on their empirical performance. Models are estimated on Belgian microdata from 1992 and 1997. The unitary model cannot be rejected for single person households, while it is rejected for a sample of two person households. The alternative collective model cannot be rejected for the same sample. However, since the crucial assumption of egoistic or Beckerian caring individual preferences is rejected, the comparative advantage of the collective model as basis for intrahousehold welfare evaluations cannot be fully exploited. Finally, the collective model has the best empirical fit.

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Publisher Info
Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics in its series Public Economics Working Paper Series with number ces0123.

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Length: 36 pp.
Date of creation: 2001
Date of revision:
Handle: RePEc:wpe:papers:ces0123

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Related research
Keywords: collective household models; household bargaining; intrahousehold allocation; labour supply;

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Find related papers by JEL classification:
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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. Pollak, Robert A, 1977. "Price Dependent Preferences," American Economic Review, American Economic Association, vol. 67(2), pages 64-75, March. [Downloadable!] (restricted)
  4. Dauphin, Anyck & Fortin, Bernard, 2001. "A test of collective rationality for multi-person households," Economics Letters, Elsevier, vol. 71(2), pages 211-216, May. [Downloadable!] (restricted)
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  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. Apps, P.F. & Rees, R., 1996. "Collective Labor Supply and Household Production," Papers 301, Australian National University - Department of Economics.
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  7. Blundell, Richard & Walker, Ian, 1986. "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-Section Data," Review of Economic Studies, Blackwell Publishing, vol. 53(4), pages 539-58, August. [Downloadable!] (restricted)
  8. Vermeulen, Frederic, 2002. " Collective Household Models: Principles and Main Results," Journal of Economic Surveys, Blackwell Publishing, vol. 16(4), pages 533-64, September. [Downloadable!] (restricted)
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  9. Frederic Vermeulen & Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Nicolas Moreau & Michal Myck , 2006. "Collective Models of Labor Supply with Nonconvex Budget Sets and Nonparticipation: A Calibration Approach," Review of Economics of the Household, Springer, vol. 4(2), pages 113-127, 06. [Downloadable!] (restricted)
  10. Alderman, H. & Chiappori, P.A. & Haddad, L., 1994. "Unitary versus Collective Models of the Household: Time to Shift the Burden of Proof?," DELTA Working Papers 94-17, DELTA (Ecole normale supérieure).
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  11. Blundell, Richard, 1988. "Consumer Behaviour: Theory and Empirical Evidence--a Survey," Economic Journal, Royal Economic Society, vol. 98(389), pages 16-65, March. [Downloadable!] (restricted)
  12. Alderman, Harold, et al, 1995. "Unitary versus Collective Models of the Household: Is It Time to Shift the Burden of Proof?," World Bank Research Observer, Oxford University Press, vol. 10(1), pages 1-19, February.
  13. Browning, Martin & Francois Bourguignon & Pierre-Andre Chiappori & Valerie Lechene, 1994. "Income and Outcomes: A Structural Model of Intrahousehold Allocation," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1067-96, December. [Downloadable!] (restricted)
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  14. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February. [Downloadable!] (restricted)
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  15. Bourguignon, F. & Browning, M. & Chiappori, P. A., 1995. "The Collective Approach to Household Behaviour," DELTA Working Papers 95-04, DELTA (Ecole normale supérieure).
  16. Bourguignon, F. & Browning, M. & Chiappori, P.A. & Lechene, V., 1992. "Intra Household Allocation of Consumption : A Model and Some Evidence from French Data," DELTA Working Papers 92-08, DELTA (Ecole normale supérieure).
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  17. Arthur Lewbel, 2001. "Demand Systems with and without Errors," American Economic Review, American Economic Association, vol. 91(3), pages 611-618, June. [Downloadable!] (restricted)
  18. Blundell, Richard William & Meghir, Costas, 1985. "Selection Criteria for a Microeconometric Model of Labour Supply," CEPR Discussion Papers 57, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  19. Brett, Craig, 1998. "Tax reform and collective family decision-making," Journal of Public Economics, Elsevier, vol. 70(3), pages 425-440, December. [Downloadable!] (restricted)
  20. 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.
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  21. Pierre-André Chiappori & Richard Blundell & Costas Meghir, 2002. "Collective labour supply with children," IFS Working Papers W02/08, Institute for Fiscal Studies. [Downloadable!]
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  22. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
  23. Frederic Vermeulen, 2002. "A collective model for female labour supply with nonparticipation and taxation," Public Economics Working Paper Series ces0214, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics. [Downloadable!]
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  24. Lundberg, Shelly J, 1988. "Labor Supply of Husbands and Wives: A Simultaneous Equations Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 224-35, May. [Downloadable!] (restricted)
  25. Fortin, Bernard & Lacroix, Guy, 1997. "A Test of the Unitary and Collective Models of Household Labour Supply," Economic Journal, Royal Economic Society, vol. 107(443), pages 933-55, July. [Downloadable!] (restricted)
  26. Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2002. "Collective Labor Supply: Heterogeneity and Nonparticipation," Research Unit Working Papers 0210, Laboratoire d'Economie Appliquee, INRA. [Downloadable!]
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  27. 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. Olivier Donni, 2004. "Labor Supply, Home Production and Welfare Comparisons," Cahiers de recherche 0427, CIRPEE. [Downloadable!]
    Other versions:
  2. 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:
  3. Maria Concetta Chiuri & Ernesto Longobardi, . "Welfare analysis of fiscal reforms in Europe: Does the representation of family decision processes matter? Evidence from Italy," series 0007, Dipartimento di Scienze Economiche - Università di Bari. [Downloadable!]
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This page was last updated on 2009-11-27.

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