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Family Bargaining and Welfare

  • Rubalcava, L.
  • Thomas, D.

Recent research on household behavior suggests that, ceteris paribus, a woman's "power" within a household influences consumption and time allocation choices. From an empirical point of view, a central stumbling block in this line of inquiry has been identification of sources of "power" that can plausibly be treated as exogenous. Aid to Families with Dependent Children, AFDC, was paid only to single women with children. The benefit level provides a natural fall-back for a low-income woman with children who is contemplating separation from her partner. As AFDC payments increase, separation will become more attractive and, the authors conjecture, the relative bargaining power of the woman in a household should also increase. If this is true, and if bargaining power does affect allocation decisions within the household, then the AFDC benefit level should affect household choices in intact families. This hypothesis is tested using the Panel Study of Income Data from 1968 through 1992.

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Paper provided by RAND - Labor and Population Program in its series Papers with number 00-10.

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Length: 36 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:randlp:00-10
Contact details of provider: Postal: RAND, Labor and Population Program, 1700 Main Street, P.O. Box 2138 Santa Monica, CA 90407-2138.
Phone: (310) 393-0411, x7359
Fax: 310-393-4818
Web page: http://www.rand.org/labor.htmlEmail:


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  1. Becker, Gary S, 1974. "A Theory of Marriage: Part II," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S11-S26, Part II, .
  2. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
  3. Chiappori, P.A., 1989. "Collective Labour Supply and Welfare," DELTA Working Papers 89-07, DELTA (Ecole normale supérieure).
  4. Duncan Thomas, 1990. "Intra-Household Resource Allocation: An Inferential Approach," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 635-664.
  5. Lundberg, S.J. & Pollak, R.A. & Wales, T.J., 1994. "Do Husbands and Wives Pool Their Resources? Evidence from U.K. Child Benefit," Discussion Papers in Economics at the University of Washington 94-6, Department of Economics at the University of Washington.
  6. Hilary Williamson Hoynes, 1995. "Does Welfare Play Any Role in Female Headship Decisions?," NBER Working Papers 5149, National Bureau of Economic Research, Inc.
  7. 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.
  8. Bergstrom, T.C., 1993. "A Survey of Theories of the Family," Papers 93-02, Michigan - Center for Research on Economic & Social Theory.
  9. 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.
  10. R. A. Moffitt & R. Reville & A. E. Winkler, . "State AFDC rules regarding the treatment of cohabitors: 1993," Institute for Research on Poverty Discussion Papers 1058-95, University of Wisconsin Institute for Research on Poverty.
  11. Bourguignon, F. & Chiappori, P-A., 1991. "Collective Models of Household Behaviour: An Introduction," DELTA Working Papers 91-29, DELTA (Ecole normale supérieure).
  12. Martin Browning & Pierre-Andre Chiappori, 1994. "Efficient Intra-Household Allocations: a General Characterization and Empirical Tests," Department of Economics Working Papers 1994-02, McMaster University.
  13. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  14. Jonathan Gruber, 1996. "Cash Welfare as a Consumption Smoothing Mechanism for Single Mothers," NBER Working Papers 5738, National Bureau of Economic Research, Inc.
  15. Thomas, D., 1995. "Like Father, Like Son, Like Mother, Like Daughter, Parental Resources and Child Height," Papers 95-01, RAND - Reprint Series.
  16. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
  17. T. Paul Schultz, 1990. "Testing the Neoclassical Model of Family Labor Supply and Fertility," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 599-634.
  18. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Working Papers 91-08, University of Washington, Department of Economics.
  19. 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.
  20. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  21. Marjorie B. McElroy, 1990. "The Empirical Content of Nash-Bargained Household Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 559-583.
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