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Collective Labour Supply: Heterogeneity and Non-Participation

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  • Blundell, Richard
  • Meghir, Costas
  • Chiappori, Pierre-André
  • Magnac, Thierry

Abstract

We present identification and estimation results for the 'collective' model of labour supply in which there are discrete choices, censoring of hours and non-participation in employment. We derive the collective restrictions on labour supply functions and contrast them with restrictions implied by the usual 'unitary' framework. Using the large changes in the wage structure between men and women in the UK over the last two decades we estimate a collective labour supply model for married couples without children. The implications of the unitary framework are rejected while those of the collective approach are not. The estimates of the sharing rule show that wages have a strong influence on bargaining power within couples.

Suggested Citation

  • Blundell, Richard & Meghir, Costas & Chiappori, Pierre-André & Magnac, Thierry, 2005. "Collective Labour Supply: Heterogeneity and Non-Participation," CEPR Discussion Papers 5287, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5287
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    References listed on IDEAS

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    More about this item

    Keywords

    Collective models; Labour supply;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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