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Intra-household Production and Exchange

Paper Session

Friday, Jan. 4, 2019 10:15 AM - 12:15 PM

Hyatt Regency Atlanta, Hanover A
Hosted By: International Association for Feminist Economics
  • Chair: Randy Albelda, University of Massachusetts-Boston

When Homemakers Are Compensated: A Test of Models of Individual Time Use under Alternative Divorce Regimes

Ho-Po Crystal Wong
National Tsing Hua University


The liberalization of divorce laws has reduced the commitment value of marriage. I examine the effects of the homemaking provision in family law that gives recognition to the contribution of homemakers in marriage in the division of marital properties at divorce under alternative divorce regimes. I develop a non-cooperative household model to analyze the effects of the provision on spousal behavior. The empirical findings show that spousal behavior is consistent with this non-cooperative framework under liberalized divorce regimes and the homemaking provision is found to increase wive’s performance of housework and reduce their market labor supply in unilateral divorce states.

Do Investors’ Subjective Risk Perceptions Influence Their Portfolio Choices? A Household Bargaining Perspective

Charlene Marie Kalenkoski
Texas Tech University
Xianwu Zhang
John Carroll University


The existing literature on bridge employment examines an individual’s take up of either a parttime
job or a job in a different occupation after leaving a career job and before leaving the labor
market entirely. Most of these studies use cross-sectional data and focus on the individual as
the sole decision-maker. One recent study uses longitudinal tax data and focuses narrowly on
an individual’s self-employment choices (Ramnath et al., 2017). Like this prior study, this paper
uses a hazard model to examine transitions into and out of employment in different jobs upon
leaving a career job in the U.S. We go further by exploiting the PSID to examine a household’s
transitions into different whole-of-household states, including both spouses working full time,
one spouse partially retired and one spouse fully employed, both spouses partially retired, and
both spouses fully retired. Our models focus on how joint demographic, economic, and family
situations (e.g., whether a spouse also is retired) affect these transitions, guided by cooperative
household bargaining theory.

Optimal Taxation, Household Production and Intra-household Exchange

Patricia Frances Apps
University of Sydney
Ray Rees
Ludwig-Maximilian University of Munich & CESifo


This paper presents an analysis of the optimal taxation of couples based on a model which
recognises the household as a small two-person economy engaged in production and exchange
at an implicit wage, as in Apps (1982). Results are presented for the welfare effects of joint and
individual taxation across the population and within the household, incorporating the effects of
each system on the intra-household implicit wage. Individual taxation strongly dominates joint
taxation, with gains in both equity and efficiency not only across households, as in Apps and
Rees (2017), but also within the household. Individual taxation, by reducing the outside net-oftax
pay gap between partners, simultaneously reduces the intra-household implicit pay gap. In
an economy in which the relative status of primary and secondary earners is strongly
correlated with gender, this result implies a lower net-of-tax gender pay gap both within and
outside the household. Efficiency gains are driven by the labour supply incentive effects of
improved outside opportunities for the actual or potential second earner.
Apps, P (1982), ÔInstitutional Inequality and Tax Incidence’, Journal of Public Economics, 18 (2),
Apps, P and R Rees (2017), ÒOptimal Family Taxation and Income InequalityÓ,

Marriage Markets, Intra-Household Production and Intra-Household Transfers

Shoshana Grossbard
San Diego State University


A problem of concern in many countries is that responsibility for household production is often
unfairly imposed on women. To what degree are women compensated for this work? Is the
opting out of the labor force by highly educated women in the US, as documented by Joni Hersch
(2013), possibly evidence of high husband-to-wife monetary transfers in higher income groups?
Other indirect illustrations of such transfers are reported. Likewise, we observe younger
generations often providing eldercare in extended households. To what extent is such work
compensated by intra-household redistribution of resources or transfers? This paper also
explores how marriage market conditions and marriage institutions may affect the quasi-wage
or rate at which individuals involved in their household's non-market production get
compensated. In countries where dowry or brideprice are paid the incidence and level of such
payments may be related to the amount of household production expected from children-in-law
(see Grossbard forthcoming).
I examine some implications of such transfers and possible fluctuations in the rate at which
household production is compensated within households.
Grossbard, Shoshana (forthcoming) ÒModeling Eldercare by Children and Children-in-law: The
Role of Marriage InstitutionsÓ Review of Development Economics
Hersch, Joni (2013) "Opting Out among Women with Elite Education Review of Economics of
the Household 11: 469_506
Victoria Vernon
Empire State College
Andrea Beller
University of Illinois-Urbana-Champaign
Shoshana Grossbard
San Diego State University
Patricia Frances Apps
University of Sydney
JEL Classifications
  • J1 - Demographic Economics
  • D1 - Household Behavior and Family Economics