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Commitment and the Dynamics of Household Labor Supply

Author

Listed:
  • Alexandros Theloudis

    (Tilburg University)

  • Jorge Velilla

    (University of Zaragoza)

  • Pierre-André Chiappori

    (Columbia University)

  • J. Ignacio Giménez-Nadal

    (University of Zaragoza)

  • José Alberto Molina

    (Departamento de Análisis Económico, Universidad de Zaragoza)

Abstract

The extent to which individuals commit to their partner for life has important implications. This paper develops a lifecycle collective model of the household, through which it characterizes behavior in three prominent alternative types of commitment: full, limited, and no commitment. We propose a test that distinguishes between all three types based on how contemporaneous and historical news affect household behavior. Our test permits heterogeneity in the degree of commitment across households. Using recent data from the Panel Study of Income Dynamics, we reject full and no commitment, while we find strong evidence for limited commitment.

Suggested Citation

  • Alexandros Theloudis & Jorge Velilla & Pierre-André Chiappori & J. Ignacio Giménez-Nadal & José Alberto Molina, 2022. "Commitment and the Dynamics of Household Labor Supply," Boston College Working Papers in Economics 1055, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:1055
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    Cited by:

    1. Fabio Blasutto & Egor Kozlov, 2020. "(Changing) Marriage and Cohabitation Patterns in the US: do Divorce Laws Matter?," 2020 Papers pbl245, Job Market Papers.
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    3. Belloc, Ignacio & Molina, José Alberto & Velilla, Jorge, 2023. "Effects of Lottery Wins on Household Labor Supply," IZA Discussion Papers 16327, Institute of Labor Economics (IZA).
    4. Juan Carlos Campaña & José Ignacio Giménez-Nadal & José Alberto Molina & Jorge Velilla, 2024. "The shifters of intrahousehold decision-making in European countries," Empirical Economics, Springer, vol. 66(3), pages 1055-1101, March.

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    More about this item

    Keywords

    Household behavior; Intertemporal choice; Commitment; Collective model; Family labor supply; Dynamics; Wages; PSID;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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