Married Couples’ Time Allocation Decisions and Marital Stability

The Panel Study of Income Dynamics (PSID), 1985–1992, are the data used to simultaneously examine the role of family stability to both market and household time allocation for both spouses and the role of couples’ time allocation in their probability of divorce. The study found that increases in the probabilities of divorce were only significantly correlated with decreases in wife’s housework time. It was also found by the study that increases in the husband’s market work hours and increases in the wife’s household work hours had negative effects on the probability of divorce.

Till Debt do us Part: A Model of Divorce and Personal Bankruptcy

The number of personal bankruptcies has increased dramatically since 1990, and a growing number of filers are divorced. While previous research shows that divorce significantly increases the probability of bankruptcy, these studies assume divorce is exogenous. This study uses the Panel Study of Income Dynamics to investigate the relationship between divorce and bankruptcy. Single-equation probit results show that divorce significantly increases the probability of bankruptcy and bankruptcy significantly increases the probability of divorce. However, after controlling for endogeneity, the effect of divorce on bankruptcy and the effect of bankruptcy on divorce both fall by a significant amount and are statistically insignificant. The findings suggest that future research needs to more carefully model the role that financial distress plays within a marriage.

Economic Status of Older Asians in the United States

Data from the 5-percent Census 2000 Public Use Microdata were utilized to examine the economic status of six Asian-only groups in the United States aged 65 and older. Japanese Americans’ economic status emulated that of older Whites; whereas, older Korean and Vietnamese economic status more closely resembled that of older Blacks. Regression results indicated that education, household size, and duration of immigration were significantly and positively related to household income for most of the Asian-only groups, supporting the theory that human capital, structural barriers, and acculturation all play a role in determination of household income for older Asian Americans.

Agreeing on more than chicken soup: Intra-household decision-making and treatment for child psychopathology

Using a large, U.S. dataset it is shown that children are more likely to receive needed mental health specialty treatment when women have greater decision-making power, as measured by an index of wife-favorable divorce laws and by the sex ratio at the time of marriage. Stratified analyses show that this effect is modified by the degree of marital conflict. Marriages characterized by high conflict conform more closely to the unified household model. The paper then presents a model of household decision-making consistent with these results that incorporates both objective determinants of bargaining power as well as the role of violent coercion in maintaining otherwise unsustainable equilibria. Implications for improving children’s access to mental health treatment are offered.

Combining Stated and Revealed Preference Data to Construct an Empirical Examination of Intrahousehold Bargaining

Most analysis of intrahousehold decisions has been conducted using aggregate revealed preference data where preferences of individual agents are never observed, only the household consumption outcomes are observed. We examine household behavior in a bargaining framework by combining stated preference information from individual members of the household with revealed preference information on the household’s actual choices. The resulting model provides information on the degree to which the decision is the result of a bargaining process as well as information on the factors affecting bargaining power.

The economics of gay and lesbian couples: Introduction to a special issue on gay and lesbian households

This article presents a simple conceptual framework integrating three couple-related outcomes analyzed in this volume: wage differentials in earnings related to couple formation, household formation (including cohabitation and registration as Registered Domestic Partnership), and intra-household allocation of income. It also discusses some of the articles’ main findings.

Poverty and its persistence: a comparison of natives and immigrants in Sweden

This paper analyzes poverty and its persistence in Sweden using a large panel with detailed income information obtained from tax registers. As opposed to many commonly used household panels, the features of the data utilized in this paper allow us to study native-immigrant differences in poverty. We use a hazard rate model based on multiple spells that accounts for unobserved heterogeneity and endogenous initial conditions. The empirical results suggest that there is negative duration dependence in both exit and entry hazard rates. Moreover, the transition rates are significantly affected by immigrant status, educational attainment, labor market conditions, age, and family status.

Your Money or Your Life: Managing Health,Managing Money

Using the Panel Study of Income Dynamics, this paper examines the relationship between non-collateralized debt (NCD) and health behaviors. The results reveal that households whose members tend to lead less healthy lifestyles are more likely to hold NCD. There are three possible underlying hypotheses that may explain these relationships: (a) common factors, such as preferences, shaping both debt and poorer health behaviors; (b) poorer health and health behaviors causing debt; and (c) debt causing poorer health behaviors. Our findings are not consistent with a causal relationship between health behaviors and NCD. It is likely that other factors, such as time preferences, risk aversion and self-control may underlie the observed correlation.

The response of household parental investment to child endowments

The theoretical and empirical literature on parental investment focuses on whether child-specific parental investments reinforce or compensate for a child’s initial endowments. However, many parental investments, such as neighborhood quality and family size and structure, are shared wholly or in part among all children in a household. The empirical results of this paper imply that such household parental investments compensate for low endowments, as proxied by low birth weight.

The Impact of Personal Finance Education Delivered in High School and College Courses

This study investigates the impact of personal finance education delivered in high school and college. Outcomes of interest were investment knowledge and household savings rates measured years after the financial education was delivered. A web-based survey with questions about participation in financial education, financial experiences, income and inheritances, and demographic characteristics was administered to 1,039 alumni from a large midwestern university. Participation in a college level personal finance course was associated with higher levels of investment knowledge. Experience with financial instruments appeared to explain more of the variance in both investment knowledge and savings rates. No significant relationship between taking a high school course and investment knowledge was found. Financial experiences were found to be positively associated with savings rates.

The distribution of financial well-being and income within the household

In this paper we consider the issue of the intra-household distribution of welfare directly using a survey measure of self-perceived economic well-being. We develop a theoretical model of satisfaction within the household for couples. In the empirical analysis we find that husbands and wives often report different levels of financial satisfaction. The most important correlate of relative satisfaction within the household is found to be relative income. This is a direct confirmation of the previously implicit findings and is predicted by our theoretical model.

Imagined interactions,family money management patterns and coalitions,and attitudes toward money and credit

This study explores the imagined interactions college students have with their parents about money and credit, their attitudes toward credit and money, the ways they say their parents deal with financial decisions, and the communication coalitions regarding finances they perceive existing within their family. Students’ imagined interaction pleasantness is greatest when parents jointly form a plan for paying off credit card debt and lowest when parents argue. When family coalitions exist, students report more frequent imagined interactions. Imagined interaction frequency and pleasantness are related to credit and money attitudes.

Wealth Holdings and Portfolio Allocation of the Elderly: The Role of Marital History

This paper investigates the role of marital history in terms of explaining differences in wealth holdings and portfolio allocation of older individuals by studying data from the first wave of Health and Retirement Study which was conducted in 1992. The results generally suggest that both men and women suffer from the negative shocks of past marital dissolutions in terms of household wealth accumulation. The significance level, however, differs across currently married couples, single males, and single females. The examination of the asset components of net worth also indicates that both the probability of owning a particular asset and the fraction of wealth allocated to that asset might vary depending on the elderly individuals’ marital history.

Estimating the impacts of household behavior on youth smoking: evidence from Ontario, Canada

This study attempts to evaluate the relative impacts of parents, siblings, and classmates on youth smoking by employing longitudinal data from the Waterloo Smoking Prevention Program (WSPP), a chronicle of smoking habits of students enrolled in various high schools in South Western Ontario, between 1993 and 1996. The empirical results reveal household and classmate smoking to be significant determinants of individual smoking participation as well as daily smoking. Specifically, an increase in the proportion of classmates who admit to smoking and cigarette consumption by an elder sibling, are both significantly correlated with a higher probability of youth smoking. This is a consistent finding across OLS, within-individual, and IV estimates. Finally, simple OLS estimates suggest the presence of non-linear effects with respect to classmate smoking.

Does Consumer Sentiment Foretell Revolving Credit Use?

The rising level of consumer debt in the U.S. is well documented. Revolving credit (credit cards) has experienced this growth, with the level of outstanding revolving credit increasing by over 600% in inflation-adjusted dollars over the past three decades. The goal here is to gauge the extent to which consumer sentiment; namely, the University of Michigan Survey Research Center Index of Consumer Sentiment, has predictive power in explaining the aggregate use of revolving credit using time-series data. The results generally show that changes in the consumer sentiment measure are related to subsequent changes in revolving credit use.

On the sharing of temporary parental leave: the case of Sweden

This paper views temporary parental leave (leave from work to take care of a sick child) as a household public good, produced with time inputs of the parents as the only input. Assuming equal productivities in the production of temporary parental leave and equal utility functions of the spouses, different household decision-making processes are applied to develop theoretical hypotheses on sharing that are thereafter tested empirically. The empirical estimations show that the decision-making process of the spouses can be explained by a Stackelberg model with male dominance. A stronger threat-point of the female is found to push the intra household allocation of temporary parental leave towards greater sharing between the spouses. In addition, an increase in the insurance ceiling will further sharing of temporary parental leave in some families, while reducing it in others.

The Labor Market Participation of Sandwich Generation Italian Women

We empirically analyzed the labor market participation of Italian women, with special emphasis on the role of intergenerational family links. Older relatives, on the one hand, discourage the work participation of women by requiring care; on the other hand they may provide household services favoring labor supply. We studied this dual impact estimating a trivariate probit model where the three choices to be in the labor force, to use informal help from older relatives and to care for them are jointly determined. Our estimates show that care duties towards members of the previous generation hinder the labor market participation of Italian women, and that informal help received from older relatives strongly increases their probability of being engaged in paid work.

Family Financial Risk Taking When the Wife Earns More

This study investigates whether the relative bargaining power of spouses plays a role in explaining household financial risk taking. Traditional models assume that household decisions are made based on pooled resources and common preferences. In contrast, bargaining models hypothesize that household decisions depend on the relative bargaining power of spouses. According to bargaining models, if women are more risk averse, then households should exhibit less financial risk taking as the bargaining power of the wife increases. Results of an analysis of household financial risk taking in a sample of dual-earner, married households from the 2004 Survey of Consumer Finances are more consistent with decision making based on pooled resources rather than on the relative bargaining power of spouses.

The scoring rules in an endogenous election

Plurality rule is mostly criticized from being capable of choosing an alternative considered as worst by a strict majority. This paper considers elections in which the agenda consists of potential candidates strategically choosing whether or not to enter the election. In this context, we examine the ability of scoring rules to fulfil the Condorcet criterion. We show for the case of three potential candidates that Plurality rule is the only scoring rule that satisfies a version of the Condorcet criterion in two cases: 1) when preferences are single-peaked and, 2) when preferences are single-dipped.

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Using Subsidies to Promote the Adoption of Children from Foster Care

Since 1978 the federal government has implemented a variety of programs to promote the adoption of children from foster care. A key part of these programs has been the use of subsidies to lower the cost of adopting and parenting children who have been in foster care. Although subsidies are a key part of federal policy, there has been little empirical research on the effect of subsidies on adoption rates. This paper uses data from the Adoption and Foster Care Analysis and Reporting System to estimate the impact of subsidy rates on adoption rates. Subsidies to families have a positive and statistically significant effect on adoption rates.