Collective Labour Supply: Heterogeneity and Nonparticipation

58 Pages Posted: 18 Oct 2005

See all articles by Richard W. Blundell

Richard W. Blundell

UCL; IFS; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Pierre-Andre Chiappori

Columbia University - Graduate School of Arts and Sciences, Department of Economics

Thierry Magnac

Toulouse School of Economics; University of Toulouse 1 - Industrial Economic Institute (IDEI); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Costas Meghir

Yale University; Yale University - Cowles Foundation; Institute for Fiscal Studies (IFS); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: September 2005

Abstract

We present identification and estimation results for the "collective" model of labour supply in which there are discrete choices, censoring of hours and nonparticipation 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 labor 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, labor supply

JEL Classification: D11, D12, D13, D70, J22

Suggested Citation

Blundell, Richard W. and Chiappori, Pierre-Andre and Magnac, Thierry and Meghir, Costas, Collective Labour Supply: Heterogeneity and Nonparticipation (September 2005). IZA Discussion Paper No. 1785, Available at SSRN: https://ssrn.com/abstract=826425

Richard W. Blundell

UCL ( email )

Department of Economics
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HOME PAGE: http://www.ucl.ac.uk/~uctp39a/

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IZA Institute of Labor Economics

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Centre for Economic Policy Research (CEPR)

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Pierre-Andre Chiappori

Columbia University - Graduate School of Arts and Sciences, Department of Economics ( email )

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New York, NY 10027
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Thierry Magnac (Contact Author)

Toulouse School of Economics ( email )

Manufacture des Tabacs
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France

University of Toulouse 1 - Industrial Economic Institute (IDEI) ( email )

Manufacture des Tabacs
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Toulouse Cedex, F-31000
France

IZA Institute of Labor Economics ( email )

P.O. Box 7240
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Germany

Centre for Economic Policy Research (CEPR) ( email )

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United Kingdom

Costas Meghir

Yale University ( email )

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United States
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Yale University - Cowles Foundation ( email )

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National Bureau of Economic Research (NBER) ( email )

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Centre for Economic Policy Research (CEPR)

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IZA Institute of Labor Economics

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Germany

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