Household Behaviour and Social Norms : A Conjugal Contract Model with Conformism

This paper introduces conformism in a conjugal contract model, in order to explore the complex interactions between households' allocation decisions and conjugal social norms which are both endogenously determined in the model. In couples, men and women are assumed to be relatively autonomous in the allocation of their resources, but linked through the production and the joint consumption of a domestic public good. Given that their relative market wages will generally differ, the husband and wife have an incentive to negotiate and agree upon an income sharing rule - a 'conjugal contract' - in order to benefit from specialization gains. The model departs from the existing literature by introducing conformism in the bargaining process over the conjugal contract. Through the conformism of individuals, the conjugal social norm influences the marital behaviour of couples and the allocation of family resources. But the social norm itself results endogenously from the aggregation of couples' marital agreements. The model consistently explains some empirical evidence that challenge traditional economic models of household, notably the fact that women still bear the bulk of domestic tasks, even when they are better-paid than their partner in the labour market. The model shows that wage policies promoting gender wage equality 1 may lead men and women to share household duties more equally, but that conformism reduces their efficiency. The model also consistently explains the fact that new economic developments - such as women's increased labour force participation - contribute to reshape social expectations about the roles of men and women in domestic and child caring activities.