Multi-family households in a labour supply model: a calibration method with application to Poland

IZA Logo

IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 24.06.2008, 12:15 - 13:30


Presentation by 

Michal Myck (Centre for Economic Analysis, CenEA)


The collective model of labour supply opened the household ``black box" and allowed for individual treatment of partners in couples. However, the literature on labour supply has so far largely ignored a broader issue with special relevance to transition and developing countries - the distinction of single versus multi-family ("complex") households. We propose a method to account for the multi-family structure by borrowing from recent applications of the collective model and combining estimation and calibration to identify the degree of resource sharing. We assume that each household is characterised by a single between-family sharing parameter, which is calibrated on the observed labour market status and other characteristics. The method assumes that preferences over income and leisure of specific family types living in single and multi-family households are the same conditional on observable characteristics. Results of the calibrated model are compared to a simple extension of the "standard" model that does not explicitly account for sharing. We apply the method to Polish labour market data.

Download complete paper   
For more information, please contact