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.

Did the legalization of abortion increase women’s household bargaining power? Evidence from labor supply

I estimate the impact of abortion legalization on spouses’ labor supplies to test whether legalization increased women’s household bargaining power, in a collective household behavior framework. Based on CPS data, I find that wives’ labor supply decreased and their husbands’ increased, which is consistent with the bargaining hypothesis. This contrasts with most studies of abortion and birth control technologies, which predict a labor supply effect only for women, and of opposite sign. Also consistent with the bargaining interpretation, I estimate no significant impact on anti-abortion religious couples or on those who regularly used contraceptives. PSID data yield supportive evidence.

The effects of sexual orientation and marital status on how couples hold their money

Previous research has shown that intrahousehold bargaining power in different-sex couples affects household expenditures and how families hold their money. This article examines the portfolio of bank accounts held by same-sex and different-sex couples and its relationship to bargaining power and individual and relationship characteristics. Data from the U.S. Survey of Consumer Finances suggest that married couples are much more likely to hold money jointly than are same-sex or unmarried different-sex couples, even after accounting for the effects of other characteristics. However, many couples of all types hold money in joint accounts and do so more often in longer term relationships and when rearing children. Proxies for bargaining power help predict whether money will be held in individual accounts for unmarried different-sex and same-sex couples, but not for married couples. These patterns could reflect greater matching of married couples on preferences or the effects of legal and social institutions that differ by marital status and sexual orientation.

Collective Models of Labor Supply with Nonconvex Budget Sets and Nonparticipation: A Calibration Approach

We suggest a methodology to calibrate a collective model with household-specific bargaining rules and marriage-specific preferences that incorporate leisure externalities. The empirical identification relies on the assumption that some aspects of individual preferences remain the same after marriage, so that estimation on single individuals can be used. The procedure maps the complete Pareto frontier of each household in the dataset and we define alternative measures of a power index. The latter is then regressed on relevant bargaining factors, including a set of variables retracing the potential relative contributions of the spouses to household disposable income. In its capacity to handle complex budget sets and labor force participation decisions of both spouses, this framework allows the comparison of unitary and collective predictions of labor supply reactions and welfare changes entailed by fiscal reforms in a realistic setting (see Michal Myck et al., 2006; Denis Beninger et al., 2006).

On the sustainability of bargaining solutions in family decision models

This paper analyses the sustainability of family bargaining agreements by developing a non-cooperative game between two spouses with symmetric preferences. To that end, we develop, by using a general utility function, a repeated non-cooperative game involving two players with symmetric preferences, where the characterization of a Nash sub-game perfect equilibrium allows us to demonstrate that the spouse with the greater bargaining power has a greater incentive to reach an agreement. This result is also reproduced by using a particular example of linear preferences in consumption. However, the influence of the bargaining power on the sustainability of a bargaining solution depends on the specification of the individual preferences, as well as the degree of altruism between the spouses.

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.

A public good version of the collective household model: an empirical approach with an application to British household data

In this paper we consider an empirical collective household model of time allocation for two-earner households. The novelty of this paper is that we estimate a version of the collective household model, where the internally produced goods and externally purchased goods are assumed to be public. The empirical results suggest that (1) Preferences of men and women differ; (2) Although there are significant individual variations, on average the utility functions of men and women are equally weighted in the household utility function; (3) Differences in the ratio of the partners’ hourly wages are explanatory for how individual utilities are weighted in the household utility function. (4) The female’s preference for household production is influenced by family size, but this does not hold for the male; (5) Both the male and the female have a backward-bending labor supply curve; (6) Labor-supply curves are forward-bending with respect to the partner’s wage rate; (7) Our model rejects the unitary Slutsky symmetry condition.

Gender preference,biased sex ratio,and parental investments in single-child households

This article investigates parental investments in single-child households. It shows that son preference triggers more parental investments in children and its effects are stronger on investments in sons. A rise in the sex ratio creates a marriage market squeeze. It, however, has ambiguous effects on investments in children, which depends on how strong these investments are as measures for influencing children’s marriage probability. A rise in the sex ratio may particularly raise investments in daughters and lower investments in sons, or vice versa, or it may induce more or less parental investments in both sons and daughters. If the sex ratio and preference of sons are correlated, then the effect of the preference for sons on investments in children is generally ambiguous. If the sex ratio is influenced by parental health investments, then son preference induces a higher sex ratio. However, the higher sex ratio has ambiguous effects on the subsequent parental investments before a child’s marriage. We also show that parental preference of child services over a child’s marital status may explain parental investments.

The impact of biological preferences on parental investments in children and step-children

A remarriage typically involves significant changes in a family’s financial circumstance, and these changes, combined with the relative bargaining relationship between spouses, likely affect the well-being of the children who are part of the family. In this paper, I use the separate-spheres model, a theoretical model that explains the determinants of bargaining power in marriage, to analyze how a remarried couple’s bargaining relationship affects their child investment in stepfamilies. Based on this theoretical model, I build and estimate an empirical model that investigates the determinants of parental investment. As evidence of parental preference for biological children over stepchildren, I find that an increased wage rate of a biological mother significantly improves her child investment when her husband is a stepfather of the child, while there is no such effect for mothers living with the biological father of the child.

Airline Negotiations and the New Concessionary Bargaining

I ask whether the highly confrontational collective bargaining in the airlines is unique to that industry or a sign of a deepening crisis in union–management relations nationally. First, airline labor relations are reviewed in the context of extremely contentious negotiations, intense industry competition, complex and fragmented bargaining structures, frequent bankruptcies, and unpredictable external shocks. Next, concessionary bargaining in the airlines is discussed, and a new and extreme form of concessionary bargaining is identified. The emergence of the new concessionary bargaining in the airlines and its spread to the automobile sector is then interpreted as the early signs of a fundamental transformation of collective bargaining. The implications of the new concessionary bargaining are then described at the workplace, company, union, and societal levels.

Why do families actually pool their income? Evidence from Denmark

This paper analyzes income-pooling by using a unique Danish data set that includes questions on income pooling among 1,696 couples. The analyses show that most Danish households use some kind of income pooling and that the proportion of income pooled varies considerably according to individual characteristics (age, education, occupation, past partners, upbringing) and household characteristics (household income, duration of marriage, location of residence and the existence of public goods, including children). However, when all variables are evaluated in a common model, the duration of marriage and the existence of children predominantly affect the likelihood of income pooling.

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.

Government Intervention in Public Sector Industrial Relations: Lessons from the Alberta Teachers’ Association

In the public sector, Canadian governments intervene frequently in labor disputes by suspending collective bargaining and curtailing legal strikes. Previous research has focused on the contours of government intervention, such as its overall effects on collective bargaining and strikes. The discussion highlights one actor, a government, restricting the behavior of another actor, a union, using legislation and policy making. As a result, we know less about more micro-level elements and implications of the process of government intervention. I address these themes using a detailed case study of the Alberta Teachers’ Association and the strikes it coordinated in 2002.

The Feeble Strength of One? Interdependence, Strategic Interaction, and the Decentralization of Collective Bargaining

This paper contributes to research examining class formation processes among capitalists by analyzing the fracturing of multiemployer collective bargaining associations in the U.S. coal mining and steel industries. The paper evaluates three theories of bargaining decentralization and offers an alternative account. Analyzing both the earlier stability of multiemployer bargaining and its subsequent decline, the paper attributes decentralization to changes in relationships of interdependence and power among unionized firms. While broad processes of economic restructuring gave rise to these shifts, social processes involving conflict and negotiation determined the specific direction of institutional change.

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.

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 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.

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.

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.

Gender Differences in Charitable Giving in Great Britain

The predominant part of the literature states that women are more likely to donate to charitable causes but men are more generous in terms of the amount given. The last result generally derives from the focus on mean amount given. This article examines gender differences in giving focusing on the distribution of amounts donated and the probability of giving using micro-data on individual giving to charitable causes for Great Britain. Results indicate that women are generally more generous than men also in terms of the amounts donated. Quantile regression analysis shows that this pattern is robust if we take into account gender differences in individual characteristics such as household structure, education, and income. The article also investigates differences in gender preferences for varying charitable causes. Results are presented separately for single and married people, highlighting the very different gender patterns of giving behaviour found in the two groups.