CEF.UP – ECO Seminar/ Webinar

Tuesday – December 7^th, 2021 1:00 p.m. | Room 305 | Online

“Commitment and the Dynamics of Household Labor Supply “

Alexandros Theloudis – Tilburg University (joint work with PA Chiappori, JI Giménez-Nadal, JA Molina, J Velilla)

Abstract

“We study household labor supply, within the context of a dynamic collective model, and three prominent intra-household commitment regimes: full commitment, no commitment, and limited commitment. We propose a test that distinguishes among all three alternatives based on how contemporary and historical changes to the economic environment affect household behavior. We implement the test on recent data from the Panel Study of Income Dynamics in the US. Although couples and singles behave similarly in many aspects, couples’ labor supply exhibits distinctive features that are consistent with limited commitment. We then use our results to highlight several issues and caveats that arise when testing for commitment in broad risk-sharing settings.”