This project focuses on the quantitative evaluation of reforms of fiscal and social security reforms. These reforms generally have an impact on living conditions and on access to resources and affect the relationships between both the generations and the sexes, in ways that often differ from the intentions behind these reforms. We shall start with a comparative study of different fiscal systems in Europe, including social security aspects (Denmark, France, Germany, Italy, Spain, and the United Kingdom), stressing the impacts a reform can have on consumption behaviour, on the labour supply of women and men, and on the within-family distribution of wealth and welfare, for each fiscal system. In investigating these questions, an appealing representation of the decision processes of the household is the collective representation, introduced by Chiappori (1988, 1992). This type of model accounts for the presence of multiple decision centres within the household, in contrast with the traditional, or unitary, representation. This opens up the possibility to infer aspects of the within-household welfare implications of policy changes. A main contribution of this study will be a concrete comparison of the implications, for policy recommendations, of the choice between these two representations mentioned above. It will use realistic simulations taking account of the characteristics of each country. Our goal is to quantify the distortions that may affect policy recommendations obtained with the unitary representation, in the effective situation of each country, and for recent reforms or for proposals currently under discussion. The data will be simulated with a model accounting for the presence of multiple decision centres within the household (collective model). Subsequently, the data will be used to estimate for each country a set of unitary models for consumption and household labour supplies, possibly along the lines of Van Soest (1995). This will allow us to compare the results of policy evaluations obtained with both types of models on a number of dimensions, including both positive (impact on behaviour) and normative aspects (impact on individual welfare and on household welfare, and impact on inequality measures). The question we address here is: how large is concretely the size of errors committed when basing policy recommendations for the particular situations of European countries on estimations from the unitary model? If these distorsions turn out to be large, this would justify putting more effort in the empirical use of the collective model.

Project duration

18.12.2000 - 17.12.2001

Project members

Prof. Dr. Francois Laisney (Coordinator)
Prof. Dr. Miriam Beblo
Dr. Denis Beninger
Prof. Richard Blundell
Dr. Raquel Carrasco
Dr. Maria Concetta Chiuri
Dr. Valérie Lechene
Prof. Costas Meghir
Nicolas Moreau
Michal Myck
Prof. Javier Ruiz-Castillo
Prof. Hubert Stahn
Prof. Ian Walker

Cooperation partner

Prof. Martin Browning, University of Copenhagen, Kopenhagen, DK
Dr. Gauthier Lanot, Keele University, Keele, UK
Olivier Bargain, Département et Laboratoire d'Economie Théorique et Appliquée (DELTA), École Normale Supérieure, Paris, FR
Prof. Thierry Magnac, L'Institut National de la Recherche Agronomique (INRA), Laboratoire D'economie Applique (LEA), Paris, FR
Prof. Francois Bourguignon Département et Laboratoire d'Economie Théorique et Appliquée (DELTA), École Normale Supérieure (ENS), Paris, F und World Bank, Washington, USA
Dr. Olivier Donni, Département et Laboratoire d'Economie Théorique et Appliquée (DELTA), École Normale Supérieure (ENS), Paris, F und Université Laval, Québec, CA
Prof. Pierre-André Chiappori, University Chicago, Chicago, IL, USA
Dr. Isabelle Maret, Universit Louis Pasteur Strasbourg, Straßburg, FR
Prof. Jean-Marc Robin, L'Institut National de la Recherche Agronomique (INRA), Paris, F, Laboratoire D'Economie Applique (LEA), Paris, F
Dr. Bernarda Zamora, Internationaler Währungsfonds, Washington, US
Dr. Jens Bonke, The Danish National Institute for Social Research, Kopenhagen, DK
Frederic Vermeulen, Katholieke Universiteit Leuven, Leuven, BE