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Labor supply, home production, and welfare comparisons

  • Donni, Olivier

We consider the collective model of labor supply with marketable domestic production. We first show that, if domestic production is mistakenly ignored, the 'collective' indirect utility functions that are retrieved from observed behavior will be unbiased if and only if the retrieved from observed behavior will be unbiased if and only if the profit function is additive. Otherwise, in the non-additive case, the direction and the size of the bias will depend on the complementarity-substitutability of spouses' time inputs in the production process. We then show that, even if domestic labor supply functions are not observed, valid welfare comparisons are possible. This identification result generalizes that in Chiappori [Chiappori, P.A., 1992. Collective labor supply and welfare. Journal of Political Economy 100, 437-467].

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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 92 (2008)
Issue (Month): 7 (July)
Pages: 1720-1737

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Handle: RePEc:eee:pubeco:v:92:y:2008:i:7:p:1720-1737
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  1. Olivier Donni & Nicolas Moreau, 2005. "Collective Labor Supply: a Single-Equation Model and Some Evidence from French Data," Cahiers de recherche 0516, CIRPEE.
  2. Blundell, Richard & Chiappori, Pierre-André & Magnac, Thierry & Meghir, Costas, 2005. "Collective Labour Supply: Heterogeneity and Nonparticipation," IDEI Working Papers 373, Institut d'Économie Industrielle (IDEI), Toulouse.
  3. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  4. 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.
  5. Jeremy Lise & Shannon Seitz, 2005. "Consumption Inequality and Intra-Household Allocations," Labor and Demography 0504001, EconWPA.
  6. Frederic Vermeulen, 2001. "And the winner is... An empirical evaluation of two competing approaches to household labour supply," Public Economics Working Paper Series ces0123, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
  7. Juster, F Thomas & Stafford, Frank P, 1991. "The Allocation of Time: Empirical Findings, Behavioral Models, and Problems of Measurement," Journal of Economic Literature, American Economic Association, vol. 29(2), pages 471-522, June.
  8. Donni, Olivier, 2005. "Collective Female Labour Supply: Theory and Application," IZA Discussion Papers 1506, Institute for the Study of Labor (IZA).
  9. Olivier Donni, 2006. "Choix collectifs des heures travaillées, consommation publique et équilibre de Lindahl," Cahiers de recherche 0621, CIRPEE.
  10. Donni, Olivier, 2003. "Collective household labor supply: nonparticipation and income taxation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1179-1198, May.
  11. Richard Blundell & Pierre-Andr� Chiappori & Costas Meghir, 2005. "Collective Labor Supply with Children," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1277-1306, December.
  12. Eric J. Solberg & David C. Wong, 1992. "Family Time Use: Leisure, Home Production, Market Work, and Work Related Travel," Journal of Human Resources, University of Wisconsin Press, vol. 27(3), pages 485-510.
  13. Helene Couprie, 2003. "Time allocation within the family: welfare implications of life in a couple," Labor and Demography 0312003, EconWPA.
  14. Andrew Clark & Hélène Couprie & Catherine Sofer, 2004. "La modélisation collective de l'offre de travail. Mise en perspective et application aux données britanniques," Revue économique, Presses de Sciences-Po, vol. 55(4), pages 767-789.
  15. Gronau, Reuben, 1977. "Leisure, Home Production, and Work-The Theory of the Allocation of Time Revisited," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1099-1123, December.
  16. 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.
  17. Yuk-fai Fong & Junsen Zhang, 2001. "The Identification of Unobservable Independent and Spousal Leisure," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 191-202, February.
  18. J. Taylor & Irma Adelman, 2003. "Agricultural Household Models: Genesis, Evolution, and Extensions," Review of Economics of the Household, Springer, vol. 1(1), pages 33-58, January.
  19. 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.
  20. 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.
  21. B. F. Kiker & M. Mendes de Oliveira, 1992. "Optimal Allocation of Time and Estimation of Market Wage Functions," Journal of Human Resources, University of Wisconsin Press, vol. 27(3), pages 445-471.
  22. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  23. Graham, John W & Green, Carole A, 1984. "Estimating the Parameters of a Household Production Function with Joint Products," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 277-82, May.
  24. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
  25. Apps, Patricia F & Rees, Ray, 1997. "Collective Labor Supply and Household Production," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 178-90, February.
  26. Rees, Ray, 1988. "Taxation and the Household," Munich Reprints in Economics 3411, University of Munich, Department of Economics.
  27. Olivier Donni, 2003. "Collective household labor supply: nonparticipation and income taxation," Post-Print hal-00870863, HAL.
  28. repec:chk:cuhked:_093 is not listed on IDEAS
  29. repec:rus:hseeco:101654 is not listed on IDEAS
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