| Institution: | (1) Tilburg University, Tilburg, Netherlands;(2) IZA, Bonn, Germany;(3) CHILD, Turin, Italy;(4) ZEW, Mannheim, Germany;(5) IFS, London, UK;(6) UCL, London, UK;(7) Universidad Carlos III, Madrid, Spain;(8) Universitá di Bari, Bari, Italy;(9) BETA-Theme, ULP, Strasbourg, France;(10) Wadham College, Oxford, England;(11) GREMAQ and LIRHE, Toulouse, France;(12) DIW, Berlin, Germany |
| Abstract: | 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).
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