Is the Collective Model of Labor Supply Useful for Tax Policy Analysis? A Simulation Exercise

37 Pages Posted: 14 Jan 2005

See all articles by Nicolas Moreau

Nicolas Moreau

Université Laval - Département d'Économique; CIRPEE

Olivier Bargain

IZA Institute of Labor Economics; University College Dublin (UCD)

Date Written: January 2005


The literature on household behavior contains hardly any empirical research on the within-household distributional effect of tax-benefit policies. We simulate this effect in the framework of a collective model of labor supply when shifting from a joint to an individual taxation system in France. We show that the net-of-tax relative earning potential of the wife is a significant determinant of intrahousehold negotiation but with very low elasticity. Consequently, the labor supply responses to the reform are entirely driven by the traditional substitution and income effects as in a unitary model. For some households only, the reform alters the intrahousehold distribution in a way that tends to change normative conclusions. A sensitivity analysis shows that the collective model would be required if the tax reform was both radical and of extended scope.

JEL Classification: C71, D11, D12, H31, J22

Suggested Citation

Moreau, Nicolas and Bargain, Olivier, Is the Collective Model of Labor Supply Useful for Tax Policy Analysis? A Simulation Exercise (January 2005). Available at SSRN:

Nicolas Moreau (Contact Author)

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4

CIRPEE ( email )

Ste-Foy, Quebec G1K 7P4

Olivier Bargain

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072

University College Dublin (UCD) ( email )

Belfield, Dublin 4 4
+353 1 716 8357 (Phone)
+353 1 283 0068 (Fax)


Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics