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And the winner is... An empirical evaluation of two competing approaches to household labour supply

  • Frederic Vermeulen

    ()

In this paper, an empirical evaluation is presented of two competing flexible labour supply models. The first is a standard unitary model, while the second is based on the collective approach to household behaviour. The evaluation focuses on the testing of the models' theoretical implications, on their ability to identify structural information, like preferences and on their empirical performance. Models are estimated on Belgian microdata from 1992 and 1997. The unitary model cannot be rejected for single person households, while it is rejected for a sample of two person households. The alternative collective model cannot be rejected for the same sample. However, since the crucial assumption of egoistic or Beckerian caring individual preferences is rejected, the comparative advantage of the collective model as basis for intrahousehold welfare evaluations cannot be fully exploited. Finally, the collective model has the best empirical fit.

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File URL: http://www.econ.kuleuven.ac.be/ew/academic/econover/Papers/DPS0123.pdf
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Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics in its series Public Economics Working Paper Series with number ces0123.

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Length: 36 pp.
Date of creation: 2001
Date of revision:
Handle: RePEc:wpe:papers:ces0123
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  1. Blundell, Richard & Meghir, Costas, 1986. "Selection Criteria for a Microeconometric Model of Labour Supply," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 55-80, January.
  2. Chiappori, Pierre-André & Fortin, Bernard & Lacroix, Guy, 2001. "Marriage Market, Divorce Legislation and Household Labor Supply," Cahiers de recherche 0103, Université Laval - Département d'économique.
  3. Vermeulen, Frederic, 2002. " Collective Household Models: Principles and Main Results," Journal of Economic Surveys, Wiley Blackwell, vol. 16(4), pages 533-64, September.
  4. Pierre-André Chiappori & Richard Blundell & Costas Meghir, 2002. "Collective labour supply with children," IFS Working Papers W02/08, Institute for Fiscal Studies.
  5. Frederic Vermeulen, 2006. "A collective model for female labour supply with non-participation and taxation," Journal of Population Economics, Springer, vol. 19(1), pages 99-118, February.
  6. Brett, Craig, 1998. "Tax reform and collective family decision-making," Journal of Public Economics, Elsevier, vol. 70(3), pages 425-440, December.
  7. Alderman, Harold, et al, 1995. "Unitary versus Collective Models of the Household: Is It Time to Shift the Burden of Proof?," World Bank Research Observer, World Bank Group, vol. 10(1), pages 1-19, February.
  8. Browning, Martin & Francois Bourguignon & Pierre-Andre Chiappori & Valerie Lechene, 1994. "Income and Outcomes: A Structural Model of Intrahousehold Allocation," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1067-96, December.
  9. Duncan Thomas, 1990. "Intra-Household Resource Allocation: An Inferential Approach," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 635-664.
  10. Dauphin, Anyck & Fortin, Bernard, 2001. "A test of collective rationality for multi-person households," Economics Letters, Elsevier, vol. 71(2), pages 211-216, May.
  11. Vermeulen, F.M.P. & Bargain, O. & Beblo, M. & Beninger, D. & Blundell, R. & Carrasco, R. & Chiuri, M-C. & Laisney, F. & Lechene, V. & Moreau, N. & Myck, M. & Ruiz-castillo, J., 2006. "Collective models of labor supply with nonconvex budget sets and nonparticipation : A calibration approach," Other publications TiSEM 8dec6b88-3dce-460f-ab9b-2, Tilburg University, School of Economics and Management.
  12. Pollak, Robert A, 1977. "Price Dependent Preferences," American Economic Review, American Economic Association, vol. 67(2), pages 64-75, March.
  13. Arthur Lewbel, 2001. "Demand Systems with and without Errors," American Economic Review, American Economic Association, vol. 91(3), pages 611-618, June.
  14. Blundell, Richard, 1988. "Consumer Behaviour: Theory and Empirical Evidence--a Survey," Economic Journal, Royal Economic Society, vol. 98(389), pages 16-65, March.
  15. Apps, Patricia F & Rees, Ray, 1997. "Collective Labor Supply and Household Production," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 178-90, February.
  16. Alderman, H. & Chiappori, P.A. & Haddad, L., 1994. "Unitary versus Collective Models of the Household: Time to Shift the Burden of Proof?," DELTA Working Papers 94-17, DELTA (Ecole normale supérieure).
  17. Blundell, Richard & Walker, Ian, 1986. "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-Section Data," Review of Economic Studies, Wiley Blackwell, vol. 53(4), pages 539-58, August.
  18. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  19. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  20. Lundberg, Shelly J, 1988. "Labor Supply of Husbands and Wives: A Simultaneous Equations Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 224-35, May.
  21. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
  22. Chiappori, P.A., 1994. "Introducing Household Production in Collective Models of Labour Suply," DELTA Working Papers 94-18, DELTA (Ecole normale supérieure).
  23. Fortin, Bernard & Lacroix, Guy, 1997. "A Test of the Unitary and Collective Models of Household Labour Supply," Economic Journal, Royal Economic Society, vol. 107(443), pages 933-55, July.
  24. repec:ner:tilbur:urn:nbn:nl:ui:12-3106943 is not listed on IDEAS
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