Heterogeneous preferences, spousal interaction, and couples' time-use

Monika Merz, Almut Balleer and Papp, Tamás K.

No 19587, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the role of heterogenous preferences at the spousal level and that of spousal mutual insurance against wage shocks for couples’ labor supply in a time-use model. We estimate the model for couples in the German Time-Use Survey with Bayesian techniques and generate gender-specific wage-elasticities of market hours in the cross-section and for all couples. Missing mutual insurance ignores males’ behavior which we find to be substantial. Together with preference heterogeneity it shapes the elasticities’ size and distribution, especially for high and low hours worked and wage groups. Our setting is suitable to analyze nonlinear and distributional economic policy.

Keywords: Preference heterogeneity; spousal labor supply; Bayesian estimation (search for similar items in EconPapers)
JEL-codes: D13 E24 J22 (search for similar items in EconPapers)
Date: 2024-10
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