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 (), Marie-Concetta Chiuri, Francois Laisney, Valérie Lechene, Nicolas Moreau, Michal Myck and Javier Ruiz-Castillo
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Miriam Beblo: Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - University of Mannheim = Universität Mannheim
Denis Beninger: Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - University of Mannheim = Universität Mannheim
Marie-Concetta Chiuri: Centre for Household, Income, Labour and Demographic Economics (CHILD) - Centre for Household, Income, Labour and Demographic Economics (CHILD), UNIBA - Università degli studi di Bari Aldo Moro = University of Bari Aldo Moro
Valérie Lechene: IFS - Laboratory of the Institute for Fiscal Studies - Institute for Fiscal Studies, University of Oxford

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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).

Keywords: Collective model; Household labor supply; Intrahousehold allocations; Tax reform (search for similar items in EconPapers)
Date: 2006-06
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Published in Review of Economics of the Household, 2006, 4, pp.113-127. ⟨10.1007/s11150-006-0002-7⟩

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Related works:
Journal Article: 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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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00279207

DOI: 10.1007/s11150-006-0002-7

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