• Selected
• Entire List

Abstract:
Historically, in virtually all developed economies there seems to be clear evidence of an inverse relationship between female labor supply and fertility. However, particularly in the last decade or so, the relationship across countries has been positive: for example countries like Germany, Italy and Spain with the lowest fertility rates also have the lowest female participation rates. We accept the hypothesis that the reason for this lies in the combined effects of a country's tax system and system of child support, and we have sought to clarify this theoretically, using an extended version of the Galor-Weil model. The results suggest that countries with individual rather than joint taxation, and which support families through improved availability of alternatives to domestic child care, rather than through direct child payments, are likely to have both higher female labor supply and higher fertility. These results are strengthened when we take account of the heterogeneity among households that undoubtedly exists.

Fertility, Taxation, Labor Supply

Abstract:
This paper extends the standard model of life cycle consumption, saving and labor supply in a number of directions. First, it argues that consumption should be defined as expenditure on household production as well as on market goods, that is, we are interested in life cycle profiles of full consumption. If this is done, several well-known puzzles concerning life cycle consumption behaviour are resolved. Secondly, we stress the importance of the heterogeneity of household behaviour in respect of female labour supply and saving, and provide evidence to show that these are very closely related across households. Finally, we formulate theoretical and empirical models incorporating these ideas and use them to show that policy changes, such as a reduction in the progressivity of income taxation, can have effects that contrast sharply with those suggested in the existing literature.

Saving, Household Production, Full Consumption, Life Cycle

Abstract:
Apps explains why time-use data are essential for analyzing issues of gender equity and intrahousehold allocation of resources, comparing living standards, and estimating the behavioral effects of changes in policy variables. First, she shows that the neglect of these data in much of the literature on household behavior in both industrial and developing economies can be traced to unrealistic assumptions on domestic production and the mistaken idea that nonmarket time can be viewed as leisure. She argues that an approach is required that makes explicit the need for data on the time family members spend on domestic work as well as on labor supply. The author outlines an approach of this kind and uses it to identify the specialized assumptions that are used when they are missing. She also discusses the limitations of available time-use survey datasets that are due to deficiencies in survey design. The more serious and common problems are illustrated, using as case studies the Statistics South Africa 2000 Time-Use Survey and the time-use module in the Nicaraguan 1998 Living Standards Measurements Survey.

This paper is a product of the Gender Division, Poverty Reduction and Economic Management Network.

Abstract:
This paper is concerned with the question of how couples should be taxed. One reason for the importance of this issue is simply that the overwhelming majority of individuals live in households formed around couples, and so it could be argued that empirically, this is the single most important problem in personal income taxation. A second reason is that the economic theory of optimal taxation and tax reform, at least as it is presented in the mainstream literature, provides little guidance on this issue, resting as it does on models of the single person household. An old insight in the earlier public finance literature is that any discussion of the taxation of two-person households necessarily involves the recognition of the importance of household production. In this paper we try to show how a simple model of household production can be used to help the analysis of optimal taxation and tax reform, and to put the conventional wisdom, which says that it is optimal to tax women on a separate, lower tax schedule than men, on a firmer basis. What emerges clearly from the analysis is how centrally important the relationship between productivity in household production and female labour supply really is, and how little we know about it empirically.

optimal taxation, household production, labour supply

Abstract:
This paper is a survey of the literature on theoretical models of the household, paying particular attention to some of the earlier contributions, and using them to place the current state of the theory in perspective. One of its aims is to suggest that the literature's neglect of Samuelson's proposal, that households can be modelled as if they maximised a form of social welfare function, was a mistake. However, the idea following directly from the Nash bargaining models, that the household's preference ordering over the utility profiles of its members depends on exogenous variables, in particular wage rates and non-wage incomes, is an important one. Combined with Samuelson's proposal, it can be made the basis for a general approach to modelling household decision taking, flexible enough to encompass non-cooperative behaviour and Pareto inefficiencies arising out of the inevitable incompleteness and unenforceability of domestic agreements. We also point out the importance of household production and some of the implications of its neglect in modelling households. Above all, the aim is to provide a deeper understanding of the current theoretical literature on household economics by means of a survey of its history.

household behavior, family economics, household welfare, time allocation, labor supply, household production, child care, gender, discrimination, cooperative models, non-cooperative models, trade models, microeconomic history

Abstract:
This paper combines income and expenditure with time use data to provide a unique picture of the time paths of labour supplies, saving and full consumption for two-adult households over the life cycle. These data are used to test the life cycle model presented in the paper, at the core of which is the hypothesis that households face a borrowing interest rate that rises sharply with the amount of non collateral based borrowing. The household members jointly choose time paths of time use, consumption and saving over their life cycle in the face of this capital market imperfection. This model explains the data much better than does the alternative hypothesis of a perfect capital market. Finally, households are shown to differ significantly in their saving behaviour in a way that depends on secondary earner labour supply, with a strong positive association between saving and the secondary earner's income.

saving, labour supply, imperfect capital market, lifecycle

Abstract:
Recent work criticises both the logic and relevance of the theoretical basis of the approach to estimating the costs of raising children adopted in much of the economics literature. This tends to be restricted purely to models in which the household members consume market goods with given household income. The "costs of children" are perceived essentially as market consumption costs. This ignores the fact that an important, possibly preponderant element of child costs takes the form of parental time, which must be diverted from alternative uses such as market work, other house-hold production activities and leisure, to care for children. The studies also ignore the question of the distribution of income among adults and, in particular, the differential incidence of child costs on adult members of the household. In this paper we first of all argue that a satisfactory theoretical approach to modelling child costs must simultaneously incorporate an "individualistic" formulation of the household (as in Apps and Rees, 1988, 99) and a formal treatment of household production (as suggested by Becker 1965, and adapted in Apps and Rees, 1988, 99). We then provide such a model. Using data from a recent Time Use Survey, we estimate specialized versions of the model for families with two children and use the results to derive the intra-family distribution of resources and implied child-rearing costs.

Child costs, time allocation, household production

Abstract:
In this paper we compare gender differences in the allocation of time to market work, domestic work, child care, and leisure over the life cycle. Time use profiles for these activity categories are constructed on survey data for three countries: Australia, the UK and Germany. We discuss the extent to which gender differences and life cycle variation in time use can be explained by public policy, focusing on the tax treatment of the female partner and on access to high quality, affordable child care. Profiles of time use, earnings and taxes are compared over the life cycle defined on age as well as on phases that represent the key transitions in the life cycle of a typical household. Our contention is that, given the decision to have children, life cycle time use and consumption decisions of households are determined by them and by public policy. Before children arrive, the adult members of the household have high labour supplies and plenty of leisure. The presence of pre-school children, in combination with the tax treatment of the second earner's income and the cost of bought-in child care, dramatically change the pattern of time use, leading to large falls in female labour supply. We also highlight the fact that, in the three countries we study, female labour supply exhibits a very high degree of heterogeneity after the arrival of children, and we show that this has important implications for public policy.

gender, time allocation, labour supply, household taxation, life cycle

Abstract:
This paper is a survey of the literature on theoretical models of the household, paying particular attention to some of the earlier contributions, and using them to place the current state of the theory in perspective. One of its aims is to suggest that the literature's neglect of Samuelson's proposal, that households can be modeled as if they maximized a form of social welfare function, was a mistake. However, the idea following directly from the Nash bargaining models, that the household's preference ordering over the utility profiles of its members depends on exogenous variables, in particular wage rates and non-wage incomes, is an important one. Combined with Samuelson's proposal, it can be made the basis for a general approach to modeling household decision taking, flexible enough to encompass non-cooperative behavior and Pareto inefficiencies arising out of the inevitable incompleteness and unenforceability of domestic agreements. We also point out the importance of household production and some of the implications of its neglect in modeling households. Above all, the aim is to provide a deeper understanding of the current theoretical literature on household economics by means of a survey of its history.

Household behavior, Family economics, Household welfare, Time allocation, Labor supply, Household production, Child care, Gender, Discrimination, Cooperative models, Non-cooperative models, Trade models, Microeconomic history

Abstract:
Given its significance in practice, the piecewise linear tax system seems to have received disproportionately little attention in the literature on optimal income taxation. This paper offers a simple and transparent analysis of its main characteristics.

piecewise linear, income, taxation

Abstract:
In a careful and thorough empirical study, Christopher Udry (1996) shows convincingly that, in a large sample of West African households, household resource allocations were not Pareto efficient. This paper argues that observation of the Pareto inefficiency of a household resource allocation does not however refute the hypothesis that it chooses this resource allocation as if it maximises some form of household welfare function possessing the Pareto property. To refute that hypothesis it is necessary to show that the observed allocation does not represent a second best optimum. For this it will be necessary to show that the estimated parameters of the model lie in a region of the parameter space for which the second best optimality of the allocation does not hold.

empirical test, Pareto efficiency, household welfare

Abstract:
We set out a general framework for cooperative household models, based on Samuelson's idea of a household welfare function, but extending it to incorporate the key insight from Nash bargaining models - the idea that the household's preference ordering over the utility profiles of its members depends on their wage rates (or prices more generally) and non-wage incomes. Applying reasonable general restrictions on the effects of changes in these variables allows derivation of the general implications of cooperative models.

generalisation, household, model

Abstract:
Richard Sylla, Richard Tilly and Gabriel Tortella,
The State, the Financial System and Economic Modernization
Walter Eltis,
The Classical Theory of Economic Growth
Rosemary Crompton,
Restructuring Gender Relations and Employment: The Decline of the Male Breadwinner
Robert E. Litan and Anthony M. Santomero,
BrookingsWharton Papers on Financial Services, 1999
J. ForemanPeck and G. Federico,
European Industrial Policy: The 20th Century Experience
R. Barrell and N. Pain,
Innovation, Investment and the Diffusion of Technology in Europe: German Direct Investment and Economic Growth in Postwar Europe
Horst Siebert,
Globalization and Labor
David Mowery and Nathan Rosenberg,
Paths of Innovation: Technological Change in Twentieth Century America
Mark A. Lutz,
Economics for the Common Good: Two Centuries of Social Economic Thought in the Humanistic Tradition
Massimo de Angelis,
Keynesianism, Social Conflict and Political Economy
L. Haddad, J. Hoddinott and H. Alderman,
Intrahousehold Resource Allocation in Developing Countries: Models, Methods and Policy

Abstract:
In this paper we compare gender differences in the allocation of time to market work, domestic work, child care, and leisure over the life cycle. Time-use profiles for these activity categories are constructed on survey data for three countries: Australia, the UK, and Germany. We discuss the extent to which gender differences and life-cycle variation in time use can be explained by public policy, focusing on the tax treatment of the female partner and on access to high-quality, affordable child care. Profiles of time use, earnings, and taxes are compared over the life cycle defined on age as well as on phases that represent the key transitions in the life cycle of a typical household. Our contention is that, given the decision to have children, life-cycle time use and consumption decisions of households are determined by them and by public policy. Before children arrive, the adult members of the household have high labour supplies and plenty of leisure. The presence of pre-school children, in combination with the tax treatment of the second earner`s income and the cost of bought-in child care, dramatically change the pattern of time use, leading to large falls in female labour supply. We also highlight the fact that, in the three countries we study, female labour supply exhibits a very high degree of heterogeneity after the arrival of children, and we show that this has important implications for public policy.

human, mouse, spermatogonia, testicular tissue, xenograft

Abstract:
This paper applies the theory of relational contracts to make precise the idea that because households are engaged in a repeated non-cooperative game, Pareto efficient outcomes can be supported by self interest, given the specific pattern of specialisation and exchange which exists in the household. The household's choice of a particular solution from the resulting feasible set is found by the maximisation of a household welfare function, a generalisation of a suggestion originally made by Samuelson. This nests as special cases the objective functions used in currently popular models of households engaged in one-shot cooperative games. We take a specific example of such a household welfare function, characterise the determinants of the household utility distribution, and then apply the model to examine the effects of a move from joint to individual taxation. We show that on standard stylised facts, secondary earners are always better off absolutely, and define the conditions under which they will also be so relatively. This confirms the conclusions from models which concern themselves only with the across-household welfare distribution.

relational contracts, households, allocations, taxation, welfare distribution

Abstract:
Historically, there is clear evidence of an inverse relationship between female labour supply and fertility. However, the relationship across countries is now positive. Countries like Germany and Italy, with the lowest fertility, also have the lowest female participation rates. This paper analyses the extent to which this can be explained by public policy, in particular taxation and the system of child support. The results suggest that countries which have individual rather than joint taxation, and which support families through child care facilities rather than child payments, are likely to have both higher female labour supply and higher fertility.

Abstract:
In a recent paper, Piggott and Whalley (1996) argue for the superiority of joint taxation over individual taxation on the grounds that the "conventional wisdom" ignores the existence of household production, and that in the presence of this the usual Ramsey-type argument breaks down. We show in a formal model of 2-person households with domestic production that this is not in fact the case: individual taxation will in general be superior and the grounds on which it can be shown to be so involve a standard Ramsey-like condition.

Abstract:
The existing literature on optimal income taxation is limited in its ability to cast light on issues of family taxation because the model of the household on which it is based fails to capture two important characteristics of real households: that they typically contain two adults and that domestic production is an important alternative use of time to market labor supply. This paper formulates a simple and tractable model of such a household and then uses it to evaluate alternative systems for taxing couples, in terms primarily of their equity properties.

Abstract:
Tax reform proposals affect individual welfares in ways which strongly depend on the nature of specialization in household production and the pattern of trade within households. Variation in the degree of specialization in domestic production across households strongly influences the impacts on individual tax burdens of a given tax reform. The standard models of the economics literature cannot be used to analyze these issues because they ignore the two-person nature of households and the existence of household production and trade. This paper proposes a simple and tractable model to remedy this and uses it to analyze the impacts of the types of tax reform that have been the subject of recent policy debate.