Collective Labor Supply with Children

We extend the collective model of household behavior to allow for the existence of public consumption. We show how this model allows the analysis of welfare consequences of policies aimed at changing the distribution of power within the household. Our setting provides a conceptual framework for addressing issues linked to the “targeting” of specific benefits or taxes. We also show that the observation of the labor supplies and the household demand for the public good allow one to identify individual welfare and the decision process. This requires either a separability assumption or the presence of a distribution factor.

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