Family ties and labor supply

Antonia Díaz and María Guilló

Investigaciones Economicas, 2005, vol. 29, issue 2, 289-329

Abstract: We develop a theoretical model of the household where family ties impose a distortion on the job search incentives of unemployed members and on the young adults’ decision of leaving the parental house. We find that the search efforts of unemployed family members are strategic substitutes, the young adult leaves the parental house only if his market wage is sufficiently high, and a low wage for the young implies that the mother’s and the young adult’s search efforts are low and, as a result, their probabilities of unemployment are high. The presence of a household good is crucial for these results. The model predictions are roughly consistent with the Spanish evidence. (Copyright: Fundación SEPI)

Keywords: Family ties; household formation; search effort; labor supply. (search for similar items in EconPapers)
JEL-codes: D13 J22 J64 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (8)

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