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Household Sharing and Commitment: Evidence from Panel Data on Individual Expenditures and Time Use

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  • Jeremy Lise

    () (Institute for Fiscal Studies and University College London)

  • Ken Yamada

    (Institute for Fiscal Studies)

Abstract

In this paper, we analyze the nature of intra-household allocations and commitment using unique panel data on individual-specific within-household consumption expenditures and on time used for leisure, market production and home production. Specifically we estimate a dynamic collective model of the household in which husbands and wives care about private consumption, private leisure, and a public good produced in the home with time and market purchased inputs. We find that the household weight on the wife is strongly related to her relative market productivity in the cross-section. Additionally, within households the weight on the wife is related to unpredicted changes in relative wages, but the effect is about half as strong, and only statistically significant for large changes. Our results are consistent with limited commitment within the household: small shocks are fully insured while large shocks provoke a renegotiation.

Suggested Citation

  • Jeremy Lise & Ken Yamada, 2014. "Household Sharing and Commitment: Evidence from Panel Data on Individual Expenditures and Time Use," IFS Working Papers W14/05, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:14/05
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    Cited by:

    1. Doepke, M. & Tertilt, M., 2016. "Families in Macroeconomics," Handbook of Macroeconomics, Elsevier.
    2. Raül Santaeulàlia-Llopis & Yu Zheng, 2017. "Why Is Food Consumption Inequality Underestimated? A Story of Vices and Children," Working Papers 969, Barcelona Graduate School of Economics.
    3. Abraham, Arpad & Laczo, Sarolta, 2014. "Efficient risk sharing with limited commitment and storage," Economics Working Papers ECO2014/11, European University Institute.
    4. Bram De Rock & Bart Capéau, 2015. "The implications of household size and children for life-cycle saving," Working Paper Research 286, National Bank of Belgium.
    5. Blau, David M. & Goodstein, Ryan, 2016. "Commitment in the Household: Evidence from the Effect of Inheritances on the Labor Supply of Older Married Couples," IZA Discussion Papers 10059, Institute for the Study of Labor (IZA).
    6. Blau, David M. & Goodstein, Ryan M., 2016. "Commitment in the household: Evidence from the effect of inheritances on the labor supply of older married couples," Labour Economics, Elsevier, vol. 42(C), pages 123-137.
    7. Árpád Ábrahám & Sarolta Laczó, 2013. "Efficient Risk Sharing with Limited Commitment and Storage," Working Papers 697, Barcelona Graduate School of Economics.
    8. Robert A. Pollak, 2017. "How Bargaining in Marriage drives Marriage Market Equilibrium," NBER Working Papers 24000, National Bureau of Economic Research, Inc.
    9. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Frederic Vermeulen, 2014. "Household consumption when marriage is stable," IFS Working Papers W14/26, Institute for Fiscal Studies.
    10. Christoph Winter, 2014. "Accounting for the Changing Role of Family Income in Determining College Entry," Scandinavian Journal of Economics, Wiley Blackwell, pages 909-963.
    11. Jeremy Lise, 2016. "The Research Agenda: Jeremy Lise on Heterogeneity and dynamics in the labor market and within the household," EconomicDynamics Newsletter, Review of Economic Dynamics.
    12. La Mattina, Giulia, 2017. "Civil conflict, domestic violence and intra-household bargaining in post-genocide Rwanda," Journal of Development Economics, Elsevier, pages 168-198.

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