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On the Importance of Household Production in Collective Models : Evidence from U.S. Data

  • Olivier Donni


    (THEMA, IZA and Université de Cergy-Pontoise)

  • Eleonora Matteazzi



The present paper develops a theoretical model of labor supply with domestic production. It is shown that the structural components of the model can be identified without using a distribution factor, thereby generalizing the initial results of Apps and Rees (1997) and Chiappori (1997). The theoretical model is then estimated using the ATUS data. The empirical results are compared to those obtained from a similar model without domestic production.

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Paper provided by Human Capital and Economic Opportunity Working Group in its series Working Papers with number 2011-032.

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Date of creation: Aug 2011
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Handle: RePEc:hka:wpaper:2011-032
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  1. Donni, Olivier, 2005. "Labor Supply, Home Production and Welfare Comparisons," IZA Discussion Papers 1511, Institute for the Study of Labor (IZA).
  2. John Pencavel, 2005. "A Life Cycle Perspective on Changes in Earnings Inequality Among Married Men and Women," Discussion Papers 04-036, Stanford Institute for Economic Policy Research.
  3. 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.
  4. Martin Browning & Pierre-Andre Chiappori, 2006. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," Economics Series Working Papers 289, University of Oxford, Department of Economics.
  5. Benoit Rapoport & Catherine Sofer & Anne Solaz, 2011. "Household Production in a Collective Model: Some New Results," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00687274, HAL.
  6. 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.
  7. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  8. Hausman, Jerry & Ruud, Paul, 1984. "Family Labor Supply with Taxes," American Economic Review, American Economic Association, vol. 74(2), pages 242-48, May.
  9. Bloemen, Hans G., 2004. "An empirical model of collective household labour supply with nonparticipation," Serie Research Memoranda 0002, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  10. Paul J. Devereux, 2003. "Changes in male labor supply and wages," Open Access publications 10197/324, School of Economics, University College Dublin.
  11. 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.
  12. Schmidt, Peter, 1977. "Estimation of seemingly unrelated regressions with unequal numbers of observations," Journal of Econometrics, Elsevier, vol. 5(3), pages 365-377, May.
  13. Donni, Olivier, 2003. "Collective household labor supply: nonparticipation and income taxation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1179-1198, May.
  14. Donni, O., 2000. "Collective Female Labor Supply: Theory," DELTA Working Papers 2000-08, DELTA (Ecole normale supérieure).
  15. Olivier Donni & Nicolas Moreau, 2007. "Collective Labor Supply: A Single-Equation Model and Some Evidence from French Data," Journal of Human Resources, University of Wisconsin Press, vol. 42(1).
  16. 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.
  17. John Pencavel, 2002. "A Cohort Analysis of the Association between Work Hours and Wages among Men," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 251-274.
  18. 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.
  19. 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.
  20. Powell, James L, 1986. "Symmetrically Trimmed Least Squares Estimation for Tobit Models," Econometrica, Econometric Society, vol. 54(6), pages 1435-60, November.
  21. François Bourguignon & Thierry Magnac, 1990. "Labor Supply and Taxation in France," Journal of Human Resources, University of Wisconsin Press, vol. 25(3), pages 358-389.
  22. Fortin, Bernard & Lacroix, Guy, 1997. "A Test of the Unitary and Collective Models of Household Labour Supply," Economic Journal, Royal Economic Society, vol. 107(443), pages 933-55, July.
  23. Kapteyn, Arie & Kooreman, Peter & van Soest, Arthur, 1990. "Quantity Rationing and Concavity in a Flexible Household Labor Supply Model," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 55-62, February.
  24. Chiappori, Pierre-André & Donni, Olivier, 2009. "Non-unitary Models of Household Behavior: A Survey of the Literature," IZA Discussion Papers 4603, Institute for the Study of Labor (IZA).
  25. Hélène Couprie, 2007. "Time allocation within the Family: Welfare implications of life in a couple," Economic Journal, Royal Economic Society, vol. 117(516), pages 287-305, 01.
  26. 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.
  27. Olivier Donni, 2007. "Collective female labour supply: theory and application," Economic Journal, Royal Economic Society, vol. 117(516), pages 94-119, 01.
  28. Paul J. Devereux, 2004. "Changes in Relative Wages and Family Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
  29. 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.
  30. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  31. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  32. George J. Borjas, 1980. "The Relationship between Wages and Weekly Hours of Work: The Role of Division Bias," Journal of Human Resources, University of Wisconsin Press, vol. 15(3), pages 409-423.
  33. Badi H. BALTAGI & Susan GARVIN & Stephen KERMAN, 1989. "Further Monte Carlo Evidence on Seemingly Unrelated Regressions with Unequal Number of Observations," Annales d'Economie et de Statistique, ENSAE, issue 14, pages 103-115.
  34. Gronau, Reuben, 1980. "Home Production-A Forgotten Industry," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 408-16, August.
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