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Multi-family households in a labour supply model: a calibration method with application to Poland

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Models of cooperative and noncooperative behaviour opened the household ‘black box’ and allowed for individual treatment of partners in couples. However, labour supply literature has so far largely ignored a broader issue – 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 to identify the degree of sharing. We assume that each household is characterized by a between-family sharing parameter, which is calibrated on estimated preferences, observed labour market status and other characteristics. We apply the method to Polish labour market data.

Keywords: D13; I38; J22; labour supply; transition; within-household sharing; work incentives

Document Type: Research Article


Affiliations: 1: Economics Department,Universität Frankfurt, Grüneburgplatz 1, Hauspostfach 4560323 Frankfurt am Main, Germany 2: DIW-Berlin, MohrenStr 58, DE-10117 Berlin, Germany

Publication date: August 1, 2012

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