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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 Gimenéz-Nadal

    (University of Zaragoza)

  • José Alberto Molina

    (University of 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 nd strong evidence for limited commitment.

Suggested Citation

  • Alexandros Theloudis & Jorge Velilla & Pierre-André Chiappori & J. Ignacio Gimenéz-Nadal & José Alberto Molina, 2022. "Commitment and the Dynamics of Household Labor Supply," Working Papers 2022-042, Human Capital and Economic Opportunity Working Group.
  • Handle: RePEc:hka:wpaper:2022-042
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    More about this item

    Keywords

    household behavior; intertemporal choice; commitment; collective model; family labor supply; 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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