Collective Models of Labor Supply with Nonconvex Budget Sets and Nonparticipation: A Calibration Approach

Frederic Vermeulen, Olivier Bargain, Miriam Beblo, Denis Beninger, Richard Blundell (), Raquel Carrasco (), Maria Chiuri, Francois Laisney, Valérie Lechene (), Nicolas Moreau, Michal Myck and Javier Ruiz-Castillo

Review of Economics of the Household, 2006, vol. 4, issue 2, 113-127

Abstract: We suggest a methodology to calibrate a collective model with household-specific bargaining rules and marriage-specific preferences that incorporate leisure externalities. The empirical identification relies on the assumption that some aspects of individual preferences remain the same after marriage, so that estimation on single individuals can be used. The procedure maps the complete Pareto frontier of each household in the dataset and we define alternative measures of a power index. The latter is then regressed on relevant bargaining factors, including a set of variables retracing the potential relative contributions of the spouses to household disposable income. In its capacity to handle complex budget sets and labor force participation decisions of both spouses, this framework allows the comparison of unitary and collective predictions of labor supply reactions and welfare changes entailed by fiscal reforms in a realistic setting (see Michal Myck et al., 2006 ; Denis Beninger et al., 2006 ). Copyright Springer Science+Business Media, LLC 2006

Keywords: Collective model; Household labor supply; Intrahousehold allocations; Tax reform; D11; D12; J22 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (58)

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Working Paper: Collective Models of Labor Supply with Nonconvex Budget Sets and Nonparticipation: A Calibration Approach (2006)
Working Paper: Collective Models of Labor Supply with Non-convex Budget Sets and Non-Participation: A Calibration Approach (2006)
Working Paper: Collective models of labor supply with nonconvex budget sets and nonparticipation: A calibration approach (2006)
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DOI: 10.1007/s11150-006-0002-7

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