Household Sharing and Commitment: Evidence from Panel Data on Individual Expenditures and Time Use

Jeremy Lise, Ken Yamada

Research output: Contribution to journalArticlepeer-review

46 Scopus citations

Abstract

In this article, we analyse the dynamics of intra-household allocations using unique panel data on individual-specific consumption expenditures and time used for leisure, market production, and home production. Cross-sectional differences at the time of marriage in expected wage profiles between a husband and wife strongly affect the allocation of private consumption expenditures and time use by households in the cross section. There are substantial gender asymmetries in these allocations. Even for households where the husband and wife have identical wages, the private consumption expenditures for the wife are about half those for the husband. Within a given household over time, shocks to wages lead households to shift the relative weights in favour of the spouse receiving the favourable shock. Additionally, we find that households adjust the weights in response to large but not to small shocks; the adjustment to the weights is twice as large in the year leading up to a divorce; and adjustments are more frequent in dual- than in single-earner households. We interpret the data using a dynamic collective model of the household with potentially limited commitment.

Original languageEnglish (US)
Pages (from-to)2184-2219
Number of pages36
JournalReview of Economic Studies
Volume86
Issue number5
DOIs
StatePublished - Oct 1 2019

Bibliographical note

Publisher Copyright:
© 2018 The Author(s).

Keywords

  • Dynamic collective model
  • Intra-household allocations
  • Limited commitment

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