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"Chiappori, Pierre-André"
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Economics of the family
\"The family is a complex decision unit in which partners with potentially different objectives make consumption, work, and fertility decisions. Couples marry and divorce partly based on their ability to coordinate these activities, which in turn depends on how well they are matched. This book provides a comprehensive, modern, and self-contained account of the research in the growing area of family economics. The first half of the book develops several alternative models of family decision making. Particular attention is paid to the collective model and its testable implications. The second half discusses household formation and dissolution and who marries whom. Matching models with and without frictions are analyzed and the important role of within-family transfers is explained. The implications for marriage, divorce, and fertility are discussed. The book is intended for graduate students in economics and for researchers in other fields interested in the economic approach to the family\"-- Provided by publisher.
Book
Static and Intertemporal Household Decisions
We discuss the most popular static and dynamic models of household behavior. Our main objective is to explain which aspects of household decisions different models can account for. Using this insight, we describe testable implications, identification results, and estimation findings obtained in the literature. Particular attention is given to the ability of different models to answer various types of policy questions.
Journal Article
Partner Choice, Investment in Children, and the Marital College Premium
We construct a model of household decision-making in which agents consume a private and a public good, interpreted as children's welfare. Children's utility depends on their human capital, which depends on the time their parents spend with them and on the parents' human capital. We first show that as returns to human capital increase, couples at the top of the income distribution should spend more time with their children. This in turn should reinforce assortative matching, in a sense that we precisely define. We then embed the model into a transferable utility matching framework with random preferences, à la Choo and Siow (2006), which we estimate using US marriage data for individuals born between 1943 and 1972. We find that the preference for partners of the same education has significantly increased for white individuals, particularly for the highly educated. We find no evidence of such an increase for black individuals. Moreover, in line with theoretical predictions, we find that the \"marital college-plus premium\" has increasedfor women but not for men.
Journal Article
The Econometrics of Matching Models
Many questions in economics can be fruitfully analyzed in the framework of matching models. Until recently, empincal work has lagged far behind theory in this area. This review reports on recent developments that have considerably expanded the range of matching models that can be taken to the data. A leading theme is that in such twosided markets, knowing the observable characteristics of partners alone is not enough to credibly identify the relevant parameters. A combination of richer data and robust, theory-driven restrictions is required. We illustrate this on leading applications.
Journal Article
The marriage market, labor supply, and education choice
We develop an equilibrium life cycle model of education, marriage, labor supply, and consumption in a transferable utility context. Individuals start by choosing their investments in education anticipating returns in the marriage market and the labor market. They then match on the basis of the economic value of marriage and preferences. Equilibrium in the marriage market determines intrahousehold allocation of resources. Following marriage households (married or single) save, supply labor, and consume private and public commodities under uncertainty. Marriage thus has the dual role of providing public goods and offering risk sharing. The model is estimated using the British Household Panel Survey.
Journal Article
RELATIVE RISK AVERSION IS CONSTANT: EVIDENCE FROM PANEL DATA
Most classical tests of constant relative risk aversion (CRRA) based on individual portfolio composition use cross-sectional data. Such tests must assume that the distributions of wealth and preferences are independent. We use panel data to analyze how individuals' portfolio allocation between risky and riskless assets varies in response to changes in total financial wealth. We find the elasticity of the risky asset share to wealth to be small and statistically insignificant, supporting the CRRA assumption; this finding is robust when the sample is restricted to households experiencing large income variations. In addition, we find a small but significant negative correlation between wealth and risk aversion. Various extensions are discussed.
Journal Article
Investment in schooling and the marriage market
We present a model in which investment in schooling generates two kinds of returns: the labor-market return, resulting from higher wages, and a marriage-market return, defined as the impact of schooling on the marital surplus share one can extract. Men and women may have different incentives to invest in schooling because of different market wages or household roles. This asymmetry can yield a mixed equilibrium with some educated individuals marrying uneducated spouses. When the labor-market return to schooling rises, home production demands less time, and the traditional spousal labor division norms weaken, more women may invest in schooling than men.
Journal Article
FROM AGGREGATE BETTING DATA TO INDIVIDUAL RISK PREFERENCES
We show that even in the absence of data on individual decisions, the distribution of individual attitudes towards risk can be identified from the aggregate conditions that characterize equilibrium on markets for risky assets. Taking parimutuel horse races as a textbook model of contingent markets, we allow for heterogeneous bettors with very general risk preferences, including non-expected utility. Under a standard single-crossing condition on preferences, we identify the distribution of preferences among the population of bettors and we derive testable implications. We estimate the model on data from U.S. races. Specifications based on expected utility fit the data very poorly. Our results stress the crucial importance of nonlinear probability weighting. They also suggest that several dimensions of heterogeneity may be at work.
Journal Article
Fatter Attraction: Anthropometric and Socioeconomic Matching on the Marriage Market
We construct a marriage market model of matching along multiple dimensions, some of which are unobservable, in which individual preferences can be summarized by a one-dimensional index combining the various characteristics. We show that, under testable assumptions, these indices are ordinally identified and that the male and female trade-offs between their partners’ characteristics are overidentified. Using PSID data on married couples, we recover the marginal rates of substitution between body mass index (BMI) and wages or education: men may compensate 1.3 additional units of BMI with a 1 percent increase in wages, whereas women may compensate two BMI units with 1 year of education.
Journal Article
CHANGING THE RULES MIDWAY
This article analyses the effect of a reform granting alimony rights to cohabiting couples in Canada. A collective household model with a matching framework predicts that changes in alimony laws would affect existing couples and couples-to-be differently. For existing couples, it benefits the intended beneficiary but, for couples not yet formed, it generates offsetting intra-household transfers and lower intra-marital allocations for the beneficiary. Our empirical analyses confirm these predictions. Among couples united before the reform, obtaining the right to petition for alimony led women to lower their labour force participation but not among newly formed cohabiting couples.
Journal Article