Working Paper: CEPR ID: DP5287
Authors: Richard William Blundell; Pierre-Andr Chiappori; Thierry Magnac; Costas Meghir
Abstract: We present identification and estimation results for the 'collective' model of labour supply in which there are discrete choices, censoring of hours and non-participation in employment. We derive the collective restrictions on labour supply functions and contrast them with restrictions implied by the usual 'unitary' framework. Using the large changes in the wage structure between men and women in the UK over the last two decades we estimate a collective labour supply model for married couples without children. The implications of the unitary framework are rejected while those of the collective approach are not. The estimates of the sharing rule show that wages have a strong influence on bargaining power within couples.
Keywords: collective models; labour supply
JEL Codes: D11; D12; D13; D70; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| unitary model (E19) | rejected (Y60) |
| collective model (D70) | not rejected (Y40) |
| male wage increase (working) (J31) | female labor supply increase (J21) |
| male wage increase (not working) (J39) | power distribution change in household (D10) |
| power distribution change in household (D10) | female working hours increase (J21) |
| male earnings increase (working) (J31) | male consumption increase (E21) |
| unearned income increase (not working) (H24) | male retention of income increase (E25) |