March 2001 | Pierre-André Chiappori, Bernard Fortin, Guy Lacroix
This paper presents a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply. In our approach, the sex ratio on the marriage market and the rules governing divorce are examples of "distribution factors". These are defined as variables that affect the household members' bargaining position but neither preferences nor the joint budget set. We extend the collective labor supply model developed by Chiappori (JPE, 1992) to allow for distribution factors. We show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intra-household decision process. The model is estimated using PSID data for the year 1988. Our results do not reject the restrictions imposed by the model. Also, the sex ratio and divorce laws deemed favorable to women are found to impact the labor supply behavior and the decision process in the directions predicted by the theory and to have sizeable effects.
The paper investigates how distribution factors, such as the sex ratio and divorce laws, influence household labor supply. It uses a structural, microeconomic model of household behavior to estimate the effects of these factors. The results show that the sex ratio and divorce laws have significant impacts on labor supply behavior, consistent with the predictions of the theory. The model is estimated using data from the PSID for 1988, and the results support the theoretical framework. The paper concludes that the presence of distribution factors generates new testable predictions and provides a robust framework for analyzing the impact of these factors on household labor supply.This paper presents a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply. In our approach, the sex ratio on the marriage market and the rules governing divorce are examples of "distribution factors". These are defined as variables that affect the household members' bargaining position but neither preferences nor the joint budget set. We extend the collective labor supply model developed by Chiappori (JPE, 1992) to allow for distribution factors. We show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intra-household decision process. The model is estimated using PSID data for the year 1988. Our results do not reject the restrictions imposed by the model. Also, the sex ratio and divorce laws deemed favorable to women are found to impact the labor supply behavior and the decision process in the directions predicted by the theory and to have sizeable effects.
The paper investigates how distribution factors, such as the sex ratio and divorce laws, influence household labor supply. It uses a structural, microeconomic model of household behavior to estimate the effects of these factors. The results show that the sex ratio and divorce laws have significant impacts on labor supply behavior, consistent with the predictions of the theory. The model is estimated using data from the PSID for 1988, and the results support the theoretical framework. The paper concludes that the presence of distribution factors generates new testable predictions and provides a robust framework for analyzing the impact of these factors on household labor supply.