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Distributional effects in household models: separate spheres and income pooling

Browning, M; Chiappori, PA; Lechene, V; (2007) Distributional effects in household models: separate spheres and income pooling. (IFS Working Paper Series W07/03). Institute for Fiscal Studies: London, UK. Green open access

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Abstract

We derive distributional effects for a non-cooperative alternative to the unitary model of household behaviour. We consider the Nash equilibria of a voluntary contributions to public goods game. Our main result is that, in general, the two partners either choose to contribute to different public goods or they contribute to at most one common good. The former case corresponds to the separate spheres case of Lundberg and Pollak (1993). The second outcome yields (local) income pooling. A household will be in different regimes depending on the distribution of income within the household. Any bargaining model with this non-cooperative case as a breakdown point will inherit the local income pooling. We conclude that targeting benefits such as child benefits to one household member may not always have an effect on outcomes.

Type: Working / discussion paper
Title: Distributional effects in household models: separate spheres and income pooling
Open access status: An open access version is available from UCL Discovery
Keywords: Nash equilibrium, Nash bargaining, collective models, intra-household allocation, separate spheres, local income pooling
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of SandHS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/14924
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