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Family ties and labor supply

Author

Listed:
  • Antonia Díaz

    (Universidad Carlos III de Madrid)

  • M. Dolores Guilló

    (Universidad de Alicante)

Abstract

We develop a theoretical model of the household where family ties impose a distortion on the job search incentives of unemployed members and on the young adults’ decision of leaving the parental house. We find that the search efforts of unemployed family members are strategic substitutes, the young adult leaves the parental house only if his market wage is sufficiently high, and a low wage for the young implies that the mother’s and the young adult’s search efforts are low and, as a result, their probabilities of unemployment are high. The presence of a household good is crucial for these results. The model predictions are roughly consistent with the Spanish evidence. (Copyright: Fundación SEPI)

Suggested Citation

  • Antonia Díaz & M. Dolores Guilló, 2005. "Family ties and labor supply," Investigaciones Economicas, Fundación SEPI, vol. 29(2), pages 289-329, May.
  • Handle: RePEc:iec:inveco:v:29:y:2005:i:2:p:289-329
    as

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    References listed on IDEAS

    as
    1. Maite Martínez-Granado & Javier Ruiz-Castillo, 2002. "The decisions of Spanish youth: A cross-section study," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(2), pages 305-330.
    2. Shinichi Nishiyama, 2002. "Bequests, Inter Vivos Transfers, and Wealth Distribution," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 892-931, October.
    3. Apps, Patricia F & Rees, Ray, 1997. "Collective Labor Supply and Household Production," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 178-190, February.
    4. McElroy, Marjorie B, 1985. "The Joint Determination of Household Membership and Market Work: The Case of Young Men," Journal of Labor Economics, University of Chicago Press, vol. 3(3), pages 293-316, July.
    5. Olga CantÛ-S·nchez & Magda Mercader-Prats, "undated". "Poverty among children and youth in Spain: The role of parents and youth employment status," Studies on the Spanish Economy 46, FEDEA.
    6. Gianna Claudia Giannelli & Chiara Monfardini, 2003. "Joint decisions on household membership and human capital accumulation of youths. The role of expected earnings and local markets," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(2), pages 265-285, May.
    7. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    8. Chiappori, Pierre-André & Fortin, Bernard & Lacroix, Guy, 1998. "Household Labor Supply, Sharing Rule and the Marriage Market," Cahiers de recherche 9810, Université Laval - Département d'économique.
    9. Namkee Ahn & Arantza Ugidos, 1996. "The effects of the labor market situation of parents on children: inheritance of unemployment," Investigaciones Economicas, Fundación SEPI, vol. 20(1), pages 23-41, January.
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    Citations

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    Cited by:

    1. Becker, Sascha O. & Bentolila, Samuel & Fernandes, Ana & Ichino, Andrea, 2005. "Job Insecurity and Youth Emancipation: A Theoretical Approach," CEPR Discussion Papers 5339, C.E.P.R. Discussion Papers.
    2. Maria Concetta Chiuri & Daniela Del Boca, 2010. "Household Membership Decisions of Adult Children: Exploring European Diversity," LABOUR, CEIS, vol. 24(s1), pages 3-24, December.
    3. Nuno Martins & Ernesto Villanueva, 2006. "Does limited access to mortgage debt explain why young adults live with their parents?," Working Papers 0628, Banco de España;Working Papers Homepage.
    4. Sascha Becker & Samuel Bentolila & Ana Fernandes & Andrea Ichino, 2010. "Youth emancipation and perceived job insecurity of parents and children," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(3), pages 1047-1071, June.
    5. Viola Angelini & Anne Laferrère, 2013. "Parental altruism and nest leaving in Europe: evidence from a retrospective survey," Review of Economics of the Household, Springer, vol. 11(3), pages 393-420, September.

    More about this item

    Keywords

    Family ties; household formation; search effort; labor supply.;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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