Collective models of household labour supply with non-convex budget sets and non-participation: a calibration approach

further co-authors: Michal Myck, Javier Ruiz-Castillo. We present a procedure to compare the collective and unitary models of household labor supply, focusing on tax reform analysis. The procedure entails simulating real world microdata by means of the collective approach, where household members reach Pareto optimal allocations. Data are generated by a compound procedure of estimation and calibration. Identification is obtained on the basis of assumptions on how individual preferences change after marriage. Calibration aspects concern, first, an index related to the bargaining power of the spouses, and second, the coefficient of a leisure interaction term in the preferences of married individuals. The two subsequent papers contain empirical applications of the general approach.

Miriam Beblo, Denis Beninger, Richard Blundell, Raquel Carrasco, Maria-Concetta Chiuri, François Laisney, Valérie Lechene and Nicolas Moreau (2006), Collective models of household labour supply with non-convex budget sets and non-participation: a calibration approach, Review of Economics of the Household 4 , 113-127