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Collective Labor Supply: Heterogeneity and Nonparticipation

Author

Listed:
  • Richard Blundell
  • Pierre-Andre Chiappori
  • Thierry Magnac
  • Costas Meghir

    ()

Abstract

In this paper we extend the "collective" model of labour supply developed by Chiappori (1988) to allow for discrete choices, censoring and nonparticipation in employment. We derive the collective restrictions on labour supply functions that we contrast with restrictions implied by the usual "unitary" framework. We apply our results to the estimation of a collective labor supply model for married couples without children.using UK data from 1979 to 1993. Taking into account unobserved heterogeneity, we use the popular log-linear labor supply framework. The implications of the unitary framework are rejected while those of the collective approach are not. The estimates of the sharing rule show that wages have a strong influence on bargaining power within couples.

Suggested Citation

  • Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2002. "Collective Labor Supply: Heterogeneity and Nonparticipation," Research Unit Working Papers 0210, Laboratoire d'Economie Appliquee, INRA.
    • Handle: RePEc:lea:leawpi:0210
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    References listed on IDEAS

    as
    1. Richard Blundell & Ian Walker, 1986. "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-Section Data," Review of Economic Studies, Oxford University Press, vol. 53(4), pages 539-558.
    2. Pierre-André Chiappori & Olivier Donni, 2005. "Learning From a Piece of Pie: The Empirical Content of Nash Bargaining," THEMA Working Papers 2006-07, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
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    4. Esther Duflo, 2003. "Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa," World Bank Economic Review, World Bank Group, vol. 17(1), pages 1-25, June.
    5. Richard Blundell & Alan Duncan & Costas Meghir, 1998. "Estimating Labor Supply Responses Using Tax Reforms," Econometrica, Econometric Society, vol. 66(4), pages 827-862, July.
    6. Meghir, Costas & Whitehouse, Edward, 1997. "Labour market transitions and retirement of men in the UK," Journal of Econometrics, Elsevier, vol. 79(2), pages 327-354, August.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Labor supply; collective model; participation; sharing rule;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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