Essays on expectations, power and social security

In chapters four and five – ‘On Power’ – Karen analyzes data on household consumption, labor supply and wages. Chapter four proposes a non-cooperative, theoretical model on how couples jointly decide on what to buy and how much to work. Applying this model to what households in the U.S. Consumer Expenditures Survey spend on children, she finds that in the majority of households the wife is the ‘Dictator’ in that she decides what to buy. Chapter five assesses wage rates of Dutch employees in the context of a specific type of employment protection: the term of notice, which is the period that an employer has to take into account before a worker can be fired. Karen finds that if an extra month is added to the term of notice, this increases wages by three percent. She explains this by the improved bargaining position of better protected employees.