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Married with Children: A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information

  • Laurens Cherchye
  • Bram De Rock
  • Frederic Vermeulen

We propose a collective labor supply model with household production that generalizes a model of Blundell, Chiappori, and Meghir (2005). Adults' preferences depend not only on own leisure and individual private consumption of market goods. They also depend on the consumption of domestic goods, which are produced by combining market goods with individuals' time. A new identification result, which uses production shifters, is developed. We apply our model to unique data on Dutch couples with children. Our application uses a novel estimation strategy that builds upon the familiar two-stage allocation representation of the collective model. (JEL D12, J12, J22)

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 102 (2012)
Issue (Month): 7 (December)
Pages: 3377-3405

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Handle: RePEc:aea:aecrev:v:102:y:2012:i:7:p:3377-3405
Note: DOI: 10.1257/aer.102.7.3377
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  1. Pierre-André Chiappori & Richard Blundell & Costas Meghir, 2002. "Collective labour supply with children," IFS Working Papers W02/08, Institute for Fiscal Studies.
  2. Chiappori, P.A., 1994. "Introducing Household Production in Collective Models of Labour Suply," DELTA Working Papers 94-18, DELTA (Ecole normale supérieure).
  3. Aronsson, Thomas & Daunfeldt, Sven-Olov & Wikström, Magnus, 1999. "Estimating Intrahousehold Allocation in a Collective Model With Household Production," Umeå Economic Studies 495, Umeå University, Department of Economics.
  4. Blundell, Richard William & Chiappori, Pierre-André & Magnac, Thierry & Meghir, Costas, 2005. "Collective Labour Supply: Heterogeneity and Non-Participation," CEPR Discussion Papers 5287, C.E.P.R. Discussion Papers.
  5. Benoît Rapoport & Catherine Sofer & Anne Solaz, 2011. "Household production in a collective model: some new results," Journal of Population Economics, Springer, vol. 24(1), pages 23-45, January.
  6. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  7. Olivier Donni, 2004. "Labor Supply, Home Production and Welfare Comparisons," Cahiers de recherche 0427, CIRPEE.
  8. Apps, P.F. & Killingsworth, M. & Rees, R., 1996. "On the Specification of Labour Supply and Household Production Models," Papers 300, Australian National University - Department of Economics.
  9. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  10. Martin Browning & Thomas F. Crossley & Gugliemo Weber, 2002. "Asking Consumption Questions in General Purpose Surveys," CAM Working Papers 2002-05, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  11. Apps, P.F. & Rees, R., 1993. "Labour Supply, Household Production and Intra-Family Welfare Distribution," Working Papers 1993-3, University of Guelph, Department of Economics and Finance.
  12. Richard Blundell & Robin, J M, 1995. "Latent separability: grouping goods without weak separability," IFS Working Papers W95/09, Institute for Fiscal Studies.
  13. 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.
  14. 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.
  15. Laurens Cherchye & Frederic Vermeulen, 2008. "Nonparametric Analysis of Household Labor Supply: Goodness of Fit and Power of the Unitary and the Collective Model," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 267-274, May.
  16. Donni, Olivier, 2003. "Collective household labor supply: nonparticipation and income taxation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1179-1198, May.
  17. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
  18. Helene Couprie, 2003. "Time allocation within the family: welfare implications of life in a couple," Labor and Demography 0312003, EconWPA.
  19. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
  20. repec:inr:wpaper:249984 is not listed on IDEAS
  21. Martin Browning & Mette Gørtz, 2012. "Spending Time and Money within the Household," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 681-704, 09.
  22. Rees, Ray, 1988. "Taxation and the Household," Munich Reprints in Economics 3411, University of Munich, Department of Economics.
  23. Pollak, Robert A & Wachter, Michael L, 1975. "The Relevance of the Household Production Function and Its Implications for the Allocation of Time," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 255-77, April.
  24. Apps, Patricia & Rees, Ray, 2000. "Household Production, Full Consumption and the Costs of Children," IZA Discussion Papers 157, Institute for the Study of Labor (IZA).
  25. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
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  27. P.-A. Chiappori & I. Ekeland, 2009. "The Microeconomics of Efficient Group Behavior: Identification," Econometrica, Econometric Society, vol. 77(3), pages 763-799, 05.
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