Nonparametric Analysis of Household Labor Supply: Goodness-of-Fit and Power of the Unitary and the Collective Model

L.J.H. Cherchye, F.M.P. Vermeulen

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Abstract

We compare the empirical performance of unitary and collective labor supply models, using representative data from the Dutch DNB Household Survey.We conduct a nonparametric analysis that avoids the distortive impact of an erroneously speci.ed functional form for the prefer-ences and/or the intrahousehold bargaining process.Our analysis focuses on the goodness-of-.t of the two behavioral models.To guarantee a fair comparison, we complement this goodness-of-.t analysis with a power analysis.Our results strongly favor the collective approach to modeling the behavior of multi-person households
Original languageEnglish
Place of PublicationTilburg
PublisherEconometrics
Number of pages19
Volume2006-13
Publication statusPublished - 2006

Publication series

NameCentER Discussion Paper
Volume2006-13

Keywords

  • labor supply
  • collective model
  • unitary model
  • nonparametric analysis
  • revealed preferences

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