Centrum Analiz Ekonomicznych

Working Paper 04/09

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

Peter Haan, Michał Myck


Models of cooperative and non-cooperative behaviour opened the household ``black box" and allowed for individual treatment of partners in couples. However, labour supply literature has so far largely ignored a broader issue - the distinction of single versus multi-family ("complex") households. We propose a method to account for multi-family household structure by borrowing from recent applications of the collective model to identify the degree of sharing. We assume that each household is characterised by a between-family sharing parameter, which is calibrated on estimated preferences, observed labour market status and other characteristics. We apply the method to Polish labour market data.

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