Household Labor Supply, Sharing Rule and the Marriage Market

Universite Laval Working Paper No. 9810

37 Pages Posted: 24 Sep 1998

See all articles by Pierre-Andre Chiappori

Pierre-Andre Chiappori

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

Bernard Fortin

Université Laval - Département d'Économique; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Guy Lacroix

Université Laval - Département d'Économique; IZA Institute of Labor Economics

Date Written: May 1998

Abstract

In this paper we estimate a model of household labor supply based on the collective approach developed by Chiappori (JPE, 1992). This approach assumes that the intra-household decision process leads to Pareto efficient outcomes. Our model extends this theory by allowing the marriage market, and especially the sex ratio, to affect the sharing rule and the household labor supplies. We show that our model imposes new restrictions on the parameters of the labor supply functions. Also, individual preferences and the sharing rule are recovered using an identification procedure that is both simpler and more robust than in Chiappori's initial approach. The model is estimated using PSID data for the year 1988. Our results do not reject the restrictions imposed by the model. Moreover, the sex ratio influences the sharing rule and the labor supply behavior in the directions predicted by the theory. Finally, the impact of individual wage rates suggests that spouses behave in an altruistic manner within the household.

JEL Classification: D1, D7

Suggested Citation

Chiappori, Pierre-Andre and Fortin, Bernard and Lacroix, Guy, Household Labor Supply, Sharing Rule and the Marriage Market (May 1998). Universite Laval Working Paper No. 9810, Available at SSRN: https://ssrn.com/abstract=90708 or http://dx.doi.org/10.2139/ssrn.90708

Pierre-Andre Chiappori

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

420 W. 118th Street
New York, NY 10027
United States

Bernard Fortin

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada
418-656-5678 (Phone)
418-656-7798 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Guy Lacroix (Contact Author)

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada
418-656-2024 (Phone)
418-656-7798 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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