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Married with Children: A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information

  • Laurens Cherchye
  • Bram De Rock
  • Frederic Vermeulen

We propose a collective labor supply model with household production that generalizes an original model of Blundell, Chiappori and Meghir (2005). In our model, adults’ individual preferences do not only depend on own leisure and individual private consumption of market goods. They also depend on the consumption of domestic goods, which are produced by combining goods bought at the market with individuals’ time. We apply our model to new and unique data on Dutch couples with children. The data contains detailed information about the spouses’ time use and the intrahousehold allocation of all expenditures. Our application uses a novel estimation strategy that builds upon the familiar two-stage allocation representation of the collective model. We obtain interesting (and plausible) empirical results. Spouses’ preferences depend on the consumption of domestically produced goods (including children’s welfare). Next, Pareto weights depend on variables like the individual wages and the share in the household’s nonlabor income. Finally, and perhaps surprisingly, we do not find evidence that mothers care more for their children than fathers.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/131705.

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Date of creation: 2012
Date of revision:
Publication status: Published in: The American economic review (2012) v.102,p.3377-3405
Handle: RePEc:ulb:ulbeco:2013/131705
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  1. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  2. Martin Browning & Mette Gortz, 2006. "Spending time and money within the household," Economics Series Working Papers 288, University of Oxford, Department of Economics.
  3. Apps, P.F. & Rees, R., 1993. "Labor Supply, Household Production and Intra-Family Welfare Distribution," Papers 248, Australian National University - Department of Economics.
  4. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
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  7. Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2007. "Collective Labour Supply: Heterogeneity and Non-Participation," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 417-445.
  8. Aronsson, Thomas & Daunfeldt, Sven-Olov & Wikström, Magnus, 1999. "Estimating Intrahousehold Allocation in a Collective Model With Household Production," Umeå Economic Studies 495, Umeå University, Department of Economics.
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  14. Donni, Olivier, 2003. "Collective household labor supply: nonparticipation and income taxation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1179-1198, May.
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  19. Apps, P.F. & Killingsworth, M. & Rees, R., 1996. "On the Specification of Labour Supply and Household Production Models," Papers 300, Australian National University - Department of Economics.
  20. Browning, M. & Bourguignon, F. & Chiappori, P.A. & Lechene, V., 1992. "Incomes and Outcomes: A structural Model of Intra-Household Allocation," DELTA Working Papers 92-23, DELTA (Ecole normale supérieure).
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  22. Apps, Patricia & Rees, Ray, 2001. "Household production, full consumption and the costs of children," Labour Economics, Elsevier, vol. 8(6), pages 621-648, December.
  23. Shelly J. Lundberg & Robert A. Pollak & Terence J. Wales, 1997. "Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 463-480.
  24. Pollak, Robert A & Wachter, Michael L, 1975. "The Relevance of the Household Production Function and Its Implications for the Allocation of Time," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 255-77, April.
  25. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
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