Labor Supply, Home Production and Welfare Comparisons

Olivier Donni

No 1511, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 utilities that are 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 supplies are not observed, valid welfare comparisons are possible. This identification result generalizes that in Chiappori (1992).

Keywords: collective model; labor supply; home production; household; welfare analysis; identification (search for similar items in EconPapers)
JEL-codes: D13 J22 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2005-03
New Economics Papers: this item is included in nep-lab and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published - published in: Journal of Public Economics, 2007, 92 (7), 1720-1737

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Related works:
Journal Article: Labor supply, home production, and welfare comparisons (2008)
Working Paper: Labor Supply, Home Production and Welfare Comparisons (2004)
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