Labor supply, home production, and welfare comparisons

Olivier Donni

Journal of Public Economics, 2008, vol. 92, issue 7, 1720-1737

Abstract: We consider the collective model of labor supply with marketable domestic production. We first show that, if domestic production is mistakenly ignored, the 'collective' indirect utility functions that are retrieved from observed behavior will be unbiased if and only if the retrieved from observed behavior will be unbiased if and only if the profit function is additive. Otherwise, in the non-additive case, the direction and the size of the bias will depend on the complementarity-substitutability of spouses' time inputs in the production process. We then show that, even if domestic labor supply functions are not observed, valid welfare comparisons are possible. This identification result generalizes that in Chiappori [Chiappori, P.A., 1992. Collective labor supply and welfare. Journal of Political Economy 100, 437-467].

Date: 2008
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Citations: View citations in EconPapers (23)

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Related works:
Working Paper: Labor Supply, Home Production and Welfare Comparisons (2005)
Working Paper: Labor Supply, Home Production and Welfare Comparisons (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:92:y:2008:i:7:p:1720-1737

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