Intra-Household Wealth and Welfare Inequality in the US: Estimations from a Collective Model of Labor Supply

29 Pages Posted: 20 Aug 2018

See all articles by Jose Alberto Molina

Jose Alberto Molina

University of Zaragoza - Department of Economic Analysis

José Ignacio Giménez-Nadal

University of Zaragoza

Jorge Velilla

University of Zaragoza

Abstract

This paper analyzes the intra-household distribution of wealth and welfare in the United States, within a theoretical framework based on a collective model of labor supply, where household decisions are Pareto efficient, and spouses negotiate a sharing rule for non-labor income. Using the American Time Use Survey for the years 2003 to 2015, estimates show a positive correlation between individual wages and labor supply, while cross-wages go in the opposite direction. Additionally, we find that wives tend to be more altruistic in comparison to their husbands regarding the intra-household allocation of income, which leads to wealth inequalities. However, the intra-household processes appear to be efficient in terms of welfare, as increases in any source of household income are associated with decreases in intra-household inequality, as measured by the spouses' estimated indirect utility. Our results shed light on the spouses' wealth shares and the sharing rule guiding the individual allocations, which may be important in the design of policies aimed at alleviating poverty.

Keywords: collective model, labor supply, sharing rule, intra-household inequality, welfare, American Time Use Survey

JEL Classification: D15, J22

Suggested Citation

Molina Chueca, Jose Alberto and Giménez-Nadal, José Ignacio and Velilla, Jorge, Intra-Household Wealth and Welfare Inequality in the US: Estimations from a Collective Model of Labor Supply. IZA Discussion Paper No. 11707, Available at SSRN: https://ssrn.com/abstract=3234230 or http://dx.doi.org/10.2139/ssrn.3234230

Jose Alberto Molina Chueca (Contact Author)

University of Zaragoza - Department of Economic Analysis ( email )

50005 Zaragoza
Spain

José Ignacio Giménez-Nadal

University of Zaragoza ( email )

Gran Via 2
Zaragoza, 50005
Spain

Jorge Velilla

University of Zaragoza

Gran Via 2
Zaragoza, 50005
Spain

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