We extend the collective model of household behavior to allow for the existence of public consumption. We show how this model allows to analyze welfare consequences of policies aimed at changing the distribution of power within the household. In particular, we claim that our setting provides an adequate conceptual framework for addressing issues linked to the ’targetting’ of specific benefits o...

The wage elasticities of labor supply at the participation and hours worked margins are focal parameters of interest for understanding the work disincentive effects of taxes and transfers and the attendant design of optimal tax and transfer schemes. In this paper I use sweeping changes in U.S. tax policy, welfare policy, and the demand for skill over the 1980s and 1990s to identify the wage ela...

In Germany, individuals in need of long-term care receive support through benefits of the long-term care insurance. A central goal of the insurance is to support informal care provided by family members. Care recipients can choose between benefits in kind (formal home care services) and benefits in cash. From a budgetary perspective, family care is often considered a cost-saving alternative to ...

I document differences in labor supply between a set of Latin American countries and the U.S. in the period 1990-2005. These differences are mostly explained by large differences in female labor supply. In the U.S. the female labor force participation was 69% by 1990, while in Brazil and Mexico was 39% and 37%, respectively. Females began to participate more in the labor market of these countri...

Strong differences of opinion about the labor supply elasticity prevail. One camp infers that the aggregate labor supply elasticity is large because big fluctuations in aggregate hours of work occur in response to small fluctuations in workers’ productivity over the business cycle (Prescott 2005). Another camp points to estimates of low labor supply elasticities from microeconometric studies of...

When minimum down payments for durable purchases constrain a household’s debt, a persistent wage increase generates a liquidity shortage. This limits the income effect, so hours worked grow. This is the financial labor supply accelerator, which links labor supply to collateralized household borrowing. The mechanism generates a positive comovement of labor supply and household debt, whose streng...

In many European countries, increasing female labor supply is an explicit policy goal, e.g. to alleviate financial pressure on public social security systems caused by demographic change. At the same time, the stagnating female labor force participation has become a point of discussion in the US (Blau and Kahn, 2013). A large range of policies explicitly aim at establishing equal labor market o...

Rising rates of maternal employment among current and former welfare recipients have increased the use of non-parental child care. Little empirical work examines the relationship between women’s labor supply and the geographic supply of child care. We combine census data with child care provider information for the state of Maryland to explore the relationship between female labor supply and th...

The labor supply and other work incentive effects of welfare programs have long been a central concern in economic research. Work has also been an increasing focus of policy reforms in the U.S., culminating with a number of major policy changes in the 1990s whose intent was to increase employment and earnings levels of welfare recipients and other disadvantaged individuals. This paper reviews t...