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Multi-Family Households in a Labour Supply Model: A Calibration Method with Application to Poland

Author

Listed:
  • Haan, Peter

    (DIW Berlin)

  • Myck, Michal

    (Centre for Economic Analysis, CenEA)

Abstract
The collective model of labour supply opened the household “black box” and allowed for individual treatment of partners in couples. However, the literature on labour supply has so far largely ignored a broader issue with special relevance to transition and developing countries – the distinction of single versus multi-family (“complex”) households. We propose a method to account for multi-family household structure by borrowing from recent applications of the collective model and combining estimation and calibration to identify the degree of resource sharing. We assume that each household is characterised by a between-family sharing parameter, which is calibrated on estimated preferences, the observed labour market status and other characteristics. The key identifying assumption is that preferences over income and leisure of specific family types living in single and multi-family households are the same conditional on observable characteristics. We apply the method to Polish labour market data.

Suggested Citation

  • Haan, Peter & Myck, Michal, 2008. "Multi-Family Households in a Labour Supply Model: A Calibration Method with Application to Poland," IZA Discussion Papers 3611, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3611
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    References listed on IDEAS

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    1. Denis Beninger & Olivier Bargain & Miriam Beblo & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Ernesto Longobardi & Nicolas Moreau & Michal Myck & , 2006. "Evaluating the Move to a Linear Tax System in Germany and Other European Countries," Review of Economics of the Household, Springer, vol. 4(2), pages 159-180, June.
    2. Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Nicolas Moreau & Michal Myck & Javier Ruiz-Castillo , 2006. "Does the Representation of Household Behavior Matter for Welfare Analysis of Tax-benefit Policies? An Introduction," Review of Economics of the Household, Springer, vol. 4(2), pages 99-111, June.
    3. Frederic Vermeulen & Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Nicolas Moreau & Michal Myck & , 2006. "Collective Models of Labor Supply with Nonconvex Budget Sets and Nonparticipation: A Calibration Approach," Review of Economics of the Household, Springer, vol. 4(2), pages 113-127, June.
    4. Peter Haan & Michal Myck, 2010. "Safety net still in transition: labour market incentive effects of social support in Poland and Germany," Bank i Kredyt, Narodowy Bank Polski, vol. 41(3), pages 5-34.
    5. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    6. repec:nbp:journl:v:41:y:2010:i:3:p:5-34 is not listed on IDEAS
    7. Chiappori, Pierre-Andre, 1997. "Introducing Household Production in Collective Models of Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 191-209, February.
    8. Richard Blundell & Pierre-André Chiappori & Costas Meghir, 2005. "Collective Labor Supply with Children," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1277-1306, December.
    9. Haan, Peter & Myck, Michal, 2007. "Safety Net Still in Transition: Labour Market Incentive Effects of Extending Social Support in Poland," IZA Discussion Papers 3157, Institute of Labor Economics (IZA).
    10. Michal Myck & Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Ernesto Longobardi & Nicolas Moreau & , 2006. "The Working Families’ Tax Credit and Some European Tax Reforms in A Collective Setting," Review of Economics of the Household, Springer, vol. 4(2), pages 129-158, June.
    11. John Creedy & Alan Duncan, 2002. "Behavioural Microsimulation with Labour Supply Responses," Journal of Economic Surveys, Wiley Blackwell, vol. 16(1), pages 1-39, February.
    12. Frederic Vermeulen, 2002. "Collective Household Models: Principles and Main Results," Journal of Economic Surveys, Wiley Blackwell, vol. 16(4), pages 533-564, September.
    13. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    14. Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
    15. repec:bla:jecsur:v:16:y:2002:i:4:p:533-64 is not listed on IDEAS
    16. repec:bla:scandj:v:97:y:1995:i:4:p:635-59 is not listed on IDEAS
    17. Laisney, François & Beninger, Denis & Beblo, Miriam, 2003. "Welfare Analysis of Fiscal Reforms: Does the Representation of the Family Decision Process Matter? Evidence for Germany," ZEW Discussion Papers 03-31, ZEW - Leibniz Centre for European Economic Research.
    18. Bargain, Olivier B. & Morawski, Leszek & Myck, Michal & Socha, Mieczyslaw, 2007. "As SIMPL As That: Introducing a Tax-Benefit Microsimulation Model for Poland," IZA Discussion Papers 2988, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Michal Myck & Mateusz Najsztub, 2015. "Data and Model Cross-validation to Improve Accuracy of Microsimulation Results: Estimates for the Polish Household Budget Survey," International Journal of Microsimulation, International Microsimulation Association, vol. 8(1), pages 33-66.
    2. Anna Kurowska & Michał Myck & Katharina Wrohlich, 2017. "Making work pay: increasing labour supply of secondary earners in low income families with children," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 11(2), June.
    3. Michal Myck & Anna Kurowska & Michal Kundera, 2013. "Financial support for families with children and its trade-offs: balancing redistribution and parental work incentives," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 13(2), pages 59-83, December.
    4. Michał Myck & Kajetan Trzciński, 2019. "From Partial to Full Universality: The Family 500+ Programme in Poland and its Labor Supply Implications," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(03), pages 36-44, October.
    5. Berulava George & Chikava George, 2011. "The Determinants of Household Labor Supply: A Comparative Study," EERC Working Paper Series 11/13e, EERC Research Network, Russia and CIS.
    6. Krzysztof Karbownik & Michal Myck, 2017. "Who gets to look nice and who gets to play? Effects of child gender on household expenditures," Review of Economics of the Household, Springer, vol. 15(3), pages 925-944, September.
    7. repec:diw:diwwpp:dp1315 is not listed on IDEAS
    8. Anna Baranowska-Rataj & Iga Magda, 2015. "The impact of the minimum wage on job separations and working hours among young people in Poland," Working Papers 75, Institute of Statistics and Demography, Warsaw School of Economics.

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    More about this item

    Keywords

    work incentives; within-household sharing; labour supply; transition;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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