Discussion Paper Details

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Title: Collective Labour Supply: Heterogeneity and Non-Participation

Author(s): Richard Blundell, Pierre-André Chiappori, Thierry Magnac and Costas Meghir

Publication Date: October 2005

Keyword(s): collective models and labour supply

Programme Area(s): Labour Economics

Abstract: We present identification and estimation results for the 'collective' model of labour supply in which there are discrete choices, censoring of hours and non-participation in employment. We derive the collective restrictions on labour supply functions and contrast them with restrictions implied by the usual 'unitary' framework. Using the large changes in the wage structure between men and women in the UK over the last two decades we estimate a collective labour supply model for married couples without children. The implications of the unitary framework are rejected while those of the collective approach are not. The estimates of the sharing rule show that wages have a strong influence on bargaining power within couples.

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Bibliographic Reference

Blundell, R, Chiappori, P, Magnac, T and Meghir, C. 2005. 'Collective Labour Supply: Heterogeneity and Non-Participation'. London, Centre for Economic Policy Research.