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Labor Supply of Retiring Couples and Heterogeneity in Household Decision-Making Structure

This paper analyzes the labor market participation behavior of retiring couples in Norway. To account for the unobserved heterogeneity in decision-making structure within the household, I formulate a mixed model by assuming there are two types of households, the cooperative type and the non-cooperative type. I assume that non-cooperative households behave according to a Stackelberg game with the male as the leader, while cooperative households engage in a cooperative bargaining process. The estimation results show that more than half of the households are of the non-cooperative type.

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Paper provided by Statistics Norway, Research Department in its series Discussion Papers with number 404.

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Date of creation: Feb 2005
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Handle: RePEc:ssb:dispap:404
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  1. Frederic Vermeulen, 2000. "Collective household models: principles and main results," Public Economics Working Paper Series ces0028, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
  2. van Soest, Arthur & Das, Marcel & Gong, Xiaodong, 2002. "A structural labour supply model with flexible preferences," Journal of Econometrics, Elsevier, vol. 107(1-2), pages 345-374, March.
  3. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
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  7. Udry, Christopher, 1996. "Gender, Agricultural Production, and the Theory of the Household," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1010-46, October.
  8. Hærnes, Erik & Jia, Zhiyang & Strøm, Steinar, 2005. "Retirement in Non-Cooperative and Cooperative Families," Memorandum 15/2006, Oslo University, Department of Economics.
  9. 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.
  10. Hiedemann, Bridget, 1998. "A Stackelberg model of Social Security acceptance decisions in dual career households," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 263-278, February.
  11. Ted Bergstrom, 1995. "A Survey of Theories of the Family," Papers _027, University of Michigan, Department of Economics.
  12. Michael D. Hurd, 1990. "The Joint Retirement Decision of Husbands and Wives," NBER Chapters, in: Issues in the Economics of Aging, pages 231-258 National Bureau of Economic Research, Inc.
  13. Zhiyang Jia, 2005. "Retirement Behavior of Working Couples in Norway. A Dynamic Programming Approach," Discussion Papers 405, Statistics Norway, Research Department.
  14. Gary S. Becker, 1974. "A Theory of Marriage: Part II," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 11-26 National Bureau of Economic Research, Inc.
  15. Browning, M. & Chiappori, P.A., 1994. "Efficient Intra-Household allocations: A General Characterization and Empirical Tests," DELTA Working Papers 94-16, DELTA (Ecole normale supérieure).
  16. Yuk-fai Fong & Junsen Zhang, 2001. "The Identification of Unobservable Independent and Spousal Leisure," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 191-202, February.
  17. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
  18. John K. Dagsvik & Steinar Strøm, 2004. "Sectoral Labor Supply, Choice Restrictions and Functional Form," Discussion Papers 388, Statistics Norway, Research Department.
  19. Zhiqi Chen & Frances Woolley, 1999. "A Cournot-Nash Model of Family Decision Making," Carleton Economic Papers 99-13, Carleton University, Department of Economics, revised Oct 2001.
  20. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  21. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  22. Blau, David M., 1997. "Social security and the labor supply of older married couples," Labour Economics, Elsevier, vol. 4(4), pages 373-418, December.
  23. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  24. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  25. Kooreman, Peter, 1994. "Estimation of Econometric Models of Some Discrete Games," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(3), pages 255-68, July-Sept.
  26. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
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