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Distributional effects in household models: separate spheres and income pooling

  • Martin Browning

    ()

    (Institute for Fiscal Studies and Nuffield College, Oxford)

  • Pierre-André Chiappori

    ()

    (Institute for Fiscal Studies and Columbia University)

  • Valérie Lechene

    (Institute for Fiscal Studies and University College London)

We derive distributional effects for a non-cooperative alternative to the unitary model of household behaviour. We consider the Nash equilibria of a voluntary contributions to public goods game. Our main result is that, in general, the two partners either choose to contribute to di¤erent public goods or they contribute to at most one common good. The former case corresponds to the separate spheres case of Lundberg and Pollak (1993). The second outcome yields (local) income pooling. A household will be in different regimes depending on the distribution of income within the household. Any bargaining model with this non-cooperative case as a breakdown point will inherit the local income pooling. We conclude that targeting benefits such as child benefits to one household member may not always have an effect on outcomes.

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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W07/03.

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Length: 13 pp.
Date of creation: Jan 2007
Date of revision:
Handle: RePEc:ifs:ifsewp:07/03
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  1. Richard Blundell & Pierre-Andr� Chiappori & Costas Meghir, 2005. "Collective Labor Supply with Children," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1277-1306, December.
  2. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Discussion Papers in Economics at the University of Washington 91-08, Department of Economics at the University of Washington.
  3. Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211.
  4. Valerie Lechene & Ian Preston, 2005. "Household Nash Equilibrium with Voluntarily Contributed Public Goods," Economics Series Working Papers 226, University of Oxford, Department of Economics.
  5. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  6. 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.
  7. Kemp, Murray C., 1984. "A note of the theory of international transfers," Economics Letters, Elsevier, vol. 14(2-3), pages 259-262.
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