Collective labor supply with children

We extend the collective model of household behavior to allow for the existence of public consumption. We show how this model allows the analysis of welfare consequences of policies aimed at changing the distribution of power within the household. Our setting provides a conceptual framework for addressing issues linked to the "targeting" of specific benefits or taxes. We also show that the observation of the labor supplies and the household demand for the public good allow one to identify individual welfare and the decision process. This requires either a separability assumption or the presence of a distribution factor

Hedonic price equilibria, stable matching, and optimal transport: equivalence, topology, and uniqueness

Hedonic pricing with quasi-linear preferences is shown to be equivalent to stable matching with transferable utilities and a participation constraint, and to an optimal transportation (Monge-Kantorovich) linear programming problem. Optimal assignments in the latter correspond to stable matchings, and to hedonic equilibria. These assignments are shown to exist in great generality; their marginal indirect payoffs with respect to agent type are shown to be unique whenever direct payoffs vary smoothly with type. Under a generalized Spence-Mirrlees condition (also known as a twist condition) the assignments are shown to be unique and to be pure, meaning the matching is one-to-one outside a negligible set. For smooth problems set on compact, connected type spaces such as the circle, there is a topological obstruction to purity, but we give a weaker condition still guaranteeing uniqueness of the stable match

INCOME AND OUTCOMES - A STRUCTURAL MODEL OF INTRAHOUSEHOLD ALLOCATION

There is evidence from several sources that one cannot treat many-person households as a single decision maker. If this is the case, then factors such as the relative incomes of the household members may affect the final allocation decisions made by the household. We develop a method of identifying how ''incomes affect outcomes'' given conventional family expenditure data. The basic assumption we make is that household decision processes lead to efficient outcomes. We apply our method to a sample of Canadian couples with no children. We find that the final allocations of expenditures on each partner depend significantly on their relative incomes and ages and on the level of lifetime wealth

Bidimensional matching with heterogeneous preferences: Education and smoking in the marriage market

This is the author accepted manuscript. The final version is available from Oxford University Press (OUP) via the DOI in this record.We develop a frictionless matching model under transferable utility where individuals are characterized by a continuous trait and a binary attribute. The model incorporates attributes for which there are heterogeneous preferences in the population regarding their desirability, that is, the impact of the traits cannot be summarized by a one-dimensional attractiveness index. We present a general resolution strategy based on optimal control theory, and characterize the stable matching. We then consider education and smoking status, further specify the model by observing that there are more male than female smokers above each education level, and derive additional predictions about equilibrium matching patterns and how individuals with different smoking habits "marry down" or "marry up" by education. Using the CPS March and Tobacco Use Supplements for the period 1996-2003, we find that the hypotheses based on our model predictions are borne out in the data.NSFSpanish Ministry of Science and Innovatio

Erratum: Fatter attraction: Anthropometric and socioeconomic matching on the marriage market

This is the final version. Available from University of Chicago Press via the DOI in this recordAlfred Galichon pointed out to us an error in our paper “Fatter Attraction: Anthropometric and Socioeconomic Matching on the Marriage Market” (Chiappori, Oreffice, and Quintana-Domeque 2012). The properties derived in the theory section (sec. III) are not sufficient to validate the empirical strategy developed in the following section; the latter requires more specific assumptions. The issue can easily be described in the TU (transferable-utility) case (sec. III.B).We use the same notation as in the initial paper. In particular, women (men) are characterized by a vector ðX, εÞ RL RK (ðY , hÞ RK RL), where X (Y) is a vector of observable female (male) characteristics and ε (h) is a random vector reflecting female (male) unobservable attributes. Proposition 2 actually implies that, for any stable matching, the conditional distribution of the female index I(X), given the male characteristics Y, depends only on the male index J(Y ), and conversely. This property can be used to empirically estimate these indexes even in the most general framework, a possibility explored in forthcoming work

What a difference a term makes:the effect of educational attainment on marital outcomes in the UK

Abstract In the past, students in England and Wales born within the first 5 monthsof the academic year could leave school one term earlier than those born later inthe year. Focusing on women, those who were required to stay on an extra termmore frequently hold some academic qualification. Using having been required tostay on as an exogenous factor affecting academic attainment, we find that holding alow-level academic qualification has no effect on the probability of being currentlymarried for women aged 25 or above, but increases the probability of the husbandholding some academic qualification and being economically active.33 Halama

A Collective Household Labour Supply Model with Disability: Evidence from Iraq

In this study we explored the determinants of the women’s labour supply and we attempted to identify the sharing rules for married couples. The analysis relied on data derived by the Iraqi Household Socio-Economic Survey (IHSES) in 2012–2013. The study considered the housework contributed by both spouses and we also included the wife’s disability status as a distribution factor. Moreover, we estimated the sharing rules accounting for female non-participation in the labour market. The household collective model was preferred over the unitary model as the results supported that changes on wages, non-labour income, age, education, number of children, and disability as a distribution factor affect the bargaining power and the share of spouses. The findings showed that for a one percent increase on female’s daily wage rate, her share on full income was increased by 1320 Iraqi Dinar (ID) corresponding to $1.12, while reached 1470 ID ($1.25) when the domestic labour was considered. Similarly, increases on the male’s wage increased her share by 630 ID ($0.50), while increases of 1 ID in the non-labour income increased female’s share by 0.43. The estimates showed that the disabled women decreased the share by 1275 ID ($1.08). Furthermore, the findings illustrated that considering the non-participation of the wife in the labour market, her share and therefore her bargaining power was lower than their earner counterparts

Financial Structure and Economic Welfare: Applied General Equilibrium Development Economics

This review provides a common framework for researchers thinking about the next generation of micro-founded macro models of growth, inequality, and financial deepening, as well as direction for policy makers targeting microfinance programs to alleviate poverty. Topics include treatment of financial structure general equilibrium models: testing for as-if-complete markets or other financial underpinnings; examining dual-sector models with both a perfectly intermediated sector and a sector in financial autarky, as well as a second generation of these models that embeds information problems and other obstacles to trade; designing surveys to capture measures of income, investment/savings, and flow of funds; and aggregating individuals and households to the level of network, village, or national economy. The review concludes with new directions that overcome conceptual and computational limitations.National Science Foundation (U.S.)National Institutes of Health (U.S.)Templeton FoundationBill & Melinda Gates Foundatio

Priority for the Worse Off and the Social Cost of Carbon

The social cost of carbon (SCC) is a monetary measure of the harms from carbon emission. Specifically, it is the reduction in current consumption that produces a loss in social welfare equivalent to that caused by the emission of a ton of CO2. The standard approach is to calculate the SCC using a discounted-utilitarian social welfare function (SWF)—one that simply adds up the well-being numbers (utilities) of individuals, as discounted by a weighting factor that decreases with time. The discounted-utilitarian SWF has been criticized both for ignoring the distribution of well-being, and for including an arbitrary preference for earlier generations. Here, we use a prioritarian SWF, with no time-discount factor, to calculate the SCC in the integrated assessment model RICE. Prioritarianism is a well-developed concept in ethics and theoretical welfare economics, but has been, thus far, little used in climate scholarship. The core idea is to give greater weight to well-being changes affecting worse off individuals. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCC