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Intrahousehold Commitment and Intertemporal Labor Supply

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  • Pierre André Chiappori
  • José Ignacio Gimenez Nadal
  • José Alberto Molina
  • Alexandros Theloudis
  • Jorge Velilla

Abstract

This paper studies household labor supply, within the context of an intertemporal collective model, and three prominent intrahousehold commitment regimes: full commitment, no commitment, and limited commitment. We propose a test that distinguishes among all three alternatives based on how contemporary and historical changes to the economic environment affect household behavior. We implement the test on recent data from the Panel Study of Income Dynamics in the US (1999-2017). Although couples and singles behave similarly in many aspects, couples' labor supply exhibits distinctive features that are consistent with limited commitment. We then use our results to highlight several issues and caveats that arise when testing for commitment.

Suggested Citation

  • Pierre André Chiappori & José Ignacio Gimenez Nadal & José Alberto Molina & Alexandros Theloudis & Jorge Velilla, 2020. "Intrahousehold Commitment and Intertemporal Labor Supply," LISER Working Paper Series 2020-11, LISER.
  • Handle: RePEc:irs:cepswp:2020-11
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    More about this item

    Keywords

    Intertemporal collective model; Household labor supply; Commitment; PSID;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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