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Observable and Unobservable Household Sharing Rules: Evidence from Young Couples' Pocket Money


  • Lee, Jungmin

    () (Seoul National University)


The leading evidence against the unitary household models is that "who gets what" is significantly dependent upon "who earns how much." However, it is difficult to pin down the causal effect of relative earnings on intra-household resource allocation because households jointly decide both labor supply and consumption. I utilize longitudinal data to analyze the spouse's individual budgets – "pocket money." This unique data set allows for the specification of the simultaneous process of household decision-making in a fully stochastic fashion. By doing this, it is possible to differentiate unobserved spousal bargaining power from heterogeneity at the household level. The results imply that the balance of power between spouses is stable over time and robust to transitory changes in relative earnings. Public policies targeting the disadvantaged within households should be designed and implemented on the long-term basis.

Suggested Citation

  • Lee, Jungmin, 2004. "Observable and Unobservable Household Sharing Rules: Evidence from Young Couples' Pocket Money," IZA Discussion Papers 1250, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1250

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    References listed on IDEAS

    1. Stefan Dercon & Pramila Krishnan, 2000. "In Sickness and in Health: Risk Sharing within Households in Rural Ethiopia," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 688-727, August.
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    Cited by:

    1. Hamermesh Daniel S. & Slemrod Joel B, 2008. "The Economics of Workaholism: We Should Not Have Worked on This Paper," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-30, January.

    More about this item


    bargaining power; collective household models; intrahousehold resource allocation;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • J1 - Labor and Demographic Economics - - Demographic Economics

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