control rights in complex partnerships this paper develops a theory of the allocation of authority between two players who are in a complex partnership that is a partnership which produces impure public goods we show that the optimal allocation depends on technological factors the parties valuations of the goods produced and the degree of impurity of these goods when the degree of impurity is large control rights should be given to the main investor irrespective of preference considerations there are some situations in which this allocation is optimal even if the degree of impurity is very low as long as one party s investment is more important than the other party s if the parties investments are of similar importance and the degree of impurity is large shared authority is optimal with a greater share going to the low valuation party if the importance of the parties investments is similar but the degree of impurity is neither large nor small the low valuation party should receive sole authority we analyze an extension in which side payments are infeasible we check for robustness of our results in several dimensions such as allowing for multiple parties or for joint authority and apply our results to interpret a number of complex partnerships including those involving schools and child custody jel d02 o23 h41 l31

the demographic transition and the position of women a marriage market perspective we present international evidence on the marriage market implications of cohort size growth and set out a theoretical model of how marriage markets adjust to imbalances since men marry younger women secular growth in cohort size in the second phase of the demographic transition worsens the position of women this e ect has been substantial in many asian countries earlier and continues to be true in sub saharan africa with fertility decline cohort are now shrinking in east asia improves the position of women these demographic trends can explain the increase and spread in dowries in south asia and the persistence of polygyny in sub saharan africa we show that the age gap at marriage will not adjust in order to equilibrate the marriage market in response to persistent imbalances even though it accommodates transitory shocks jel categories j12 j13 j16

children as collective goods and divorce settlements the failure of many divorced fathers to comply with court mandated child support awards has been identified as a major reason why a growing number of children live in poverty in female headed households this paper presents a model that seeks to explain why so many divorced fathers allow their children s welfare to suffer as a consequence of divorce the point of departure is the recognition that children are collective consumption goods from the point of view of the father and mother within marriage proximity and altruism serve to overcome the free rider problem associated with the provision of public goods however on divorce the noncustodial parent suffers a loss of control over the allocative decisions of the custodial parent and it is not feasible for the couple to achieve a pareto optimal allocation of their joint resources a model of optimal marriage contracts is constructed in which a couple decides on the allocation of resources within marriage and on the terms of a settlement in the event

competition among differentiated health plans under adverse selection market power and adverse selection are prevalent features of the market for pre paid health plans however most of the literature on adverse selection considers extreme cases either perfect competition or monopoly if instead health plans are horizontally differentiated then i profits derived from each low risk are higher than from each high risk and ii when the profits derived from each high risk are negative cross subsidization a health authority as informed as the health plans can implement a pareto improvement both local and global deviations from cross subsidization are addressed within a nash equilibrium framework

do men with higher wages marry earlier or later using data from taiwan this paper shows that marriage age is negatively positively related to the wage rate in the sample with nonworking working wives the results reconcile the two contrasting hypotheses on the relation between wages and marriage age for men

the effect of child support payments on the labor supply of female family heads an econometric analysis recent census bureau statistics show that women who receive child support payments have higher earnings and work longer hours than women who do not does this suggest that child support unlike all other nonwage income does not deter work effort or are women who receive it simply different we use 1979 1982 cps data on divorced or separated women to estimate the determinants of hours worked when afdc participation and child support are endogenous we find evidence of unobservable differences between women who receive child support and those who do not controlling for these both child support and other nonwage income appear to reduce hours worked but the deterrent effect of child support is considerably less

the value of youth equalizing age differentials in marriages the objective of this paper is to present a model of constrained utility maximizing behaviour which is able to explain serveral features of marriage the model predicts that individuals meet in the

the connection between public transfers and private interfamily transfers abstract this paper investigates the anti poverty effectiveness of public transfers taking private transfer responses into account widespread altruistically motivated private transfers would neutralize the distributional impact of public transfers but exchange motivated transfers can reinforce the effects of public transfers on the distribution of economic well being the common technique for gauging anti poverty effectiveness subtracting public transfers from other income and measuring the poverty rate counterfactual yields results that are close to a more complex procedure that takes private transfer responses into account and some of the empirical findings suggest an exchange rather than altruistic motive for private transfers indicating that the effects of public transfers can be magnified by private behavior this is an exact reversal of the prediction that public transfers merely supplant private ones

budgetary units a weberian approach to consumption1 established consumption theory relies heavily on application of individualistic frames and market models of behavior a framework built around consumption oriented groups would facilitate progress toward a more general theory of consumption this article reintroduces and extends weber s budgetary unit concept to address this gap correcting key problems dogging the consumption literature the budgetary unit concept 1 offers a new framework for theorizing and better accounting for observed consumption patterns 2 reveals how consumption units have organizational logics preferences strengths and vulnerabilities that are consequentially distinct from market logic of production and profit and 3 focuses attention on social processes and features enabling theorization of general social patterns of consumption across diverse contexts this article highlights the explanatory power and broad applicability of weber s budgetary unit approach using the conventionally dissimilar cases of russian organized

what do we know about the effects of macroprudential policy the literature on the effectiveness of macroprudential policy tools is still in its infancy and has so far provided only limited guidance for policy decisions in recent years however increasing efforts have been made to fill this gap progress has been made in embedding macroprudential policy in theoretical models there is increasing empirical work on the effect of some macroprudential tools on a range of target variables such as quantities and prices of credit asset prices and on the amplitude of the financial cycle and financial stability in this paper we provide a critical review of recent progress in theoretical and empirical research on the effectiveness of macroprudential instruments

rationalizing child support decisions the authors provide a framework within which the child support compliance decisions of noncustodial fathers and the child support awards set by institutional agents can be coherently interpreted the model of child support transfers is able to capture qualitatively the features of the monthly payment distribution estimated parental decision rules are used to infer the implicit weights given by institutional agents to the postdivorce welfare of parents and children the authors find that the weight attached to the combined welfare of the custodial mother and child is significantly less than the weight given to the father s welfare in most sample cases copyright 1995 by american economic association

a simple tax structure for competitive equilibrium and redistribution in insurance markets with asymmetric information in their influential paper rothschild and stiglitz 6 demonstrated that the existence of nash equilibrium is not a general property of insurance markets when buyers have private information about their riskiness and firms face free entry and exit conditions this paper presents a simple and implementable system of taxes and subsidies applied to firms which permits a nash equilibrium always to exist we also show that more than one nash equilibrium is open to the regulator in particular government can effect risk discriminating redistribution without a priori knowledge of any individual buyer s riskiness hence it is not the case that the inability to distinguish between types of buyers rules out compensation risk discriminating transfers even in principle as claimed by schmalensee 7 442 finally we show that even when a nash equilibrium exists without government intervention there are always alternative and under some circumstances pareto superior equilibria open to the regulator since these alternative equilibria entail cross subsidization from low risk to high risk buyers our results suggest that the well known cross subsidization enforced through current regulatory practices is consistent with economic efficiency we conclude that the informational asymmetry assumed by rothschild and stiglitz poses distinct efficiency and distribution problems as do more conventional non informational situations of market failure and that regulators can influence the allocation of insurance through conventional instruments of intervention without assuming dictatorial control of the market

accounting for the timing of first marriage among first marriages in the united states grooms are on average 1 7 years older than their brides traditionally this fact is explained by sex differences in income we use a general equilibrium overlapping generations search model economy to show instead that sex differences in fecundity are essential to account for the age gap at first marriage whereas sex differences in income play a secondary role our model economy also accounts for other facts on the timing of first marriages that the literature has overlooked

money liquidity and monetary policy in a market based financial system banking and capital market developments are inseparable and funding conditions are closely tied to fluctuations in the leverage of market based financial intermediaries offering a window on liquidity the balance sheet growth of broker dealers provides a sense of the availability of credit contractions of broker dealer balance sheets have tended to precede declines in real economic growth even before the current turmoil for this reason balance sheet quantities of market based financial intermediaries are important macroeconomic state variables for the conduct of monetary policy

transfers among divorced couples evidence and interpretation we analyze divorce settlements made by a cohort of whites who graduated from high school in 1972 the effects of spouses incomes on the divorce transfer are estimated and used to simulate the welfare effects of divorce on husbands wives and children under alternative assumptions about marriage contracts and the ability of a couple to continue coordinating resources in the aftermath of divorce we find a positive negative relationship between divorce transfers and the growth of husband s wife s earnings during marriage the estimated expenditure on children in the divorce state is only half the accustomed level during marriage

labor market opportunities and women s decision making power within households abstract despite the perceived importance of labor market opportunities in shaping married women s outside option and their bargaining power within households as a result this link has received very little empirical attention using longitudinal data on who makes the decision on a wide range of issues within mexican households and data from the administrative records of the mexican social security institute this paper identifies the effects of relative changes in labor market opportunities for men and women on both working and non working women s decision making power i find that increases in labor market opportunities improve women s decision making power as well as children s health using differential labor demand shocks across mexican industries caused by china s admission to the wto gives similar results

what have we learned from the economics of the family the family is distinguished from other social institutions such as firms by its crucial role in the production and nurture of children and its rationale is ultimately to be found in the preferences of individuals for own children sexual reproduction means that the production of one s own child requires the participation of another person of the opposite sex the production of a child who will survive become a successful adult and produce his or her own children requires the expenditure of both personal and purchased resources over a lengthy period of time although interesting insights on the family can be culled from the classics systematic development of the economics of the family is a recent phenomenon beginning in the late 1950 s when harvey leibenstein 1957 and gary becker 1960 attempted to address the determinants of fertility behavior within the framework of consumer theory in this paper i provide a brief overview of the history of family economics since 1960 and along the way offer a selective assessment of what has been learned from it i attempt this assessment by asking how far we have progressed in answering a few of the larger theoretical empirical and policy questions that have motivated economists interests in an area customarily studied by sociologists and demographers or that have caused economists dealing with more traditional subject matter to incorporate the family into their work among the set of questions that have been addressed within the literature during the past twenty five years are 1 what are the causes of the historical association between economic growth and development and demographic transition from high to low levels of fertility and mortality of what relevance is the historical experience of currently developed countries to contemporary ldcs should fertility reduction be a primary goal of policy in the developing countries are the developed countries in danger of extinction because of fertility below replacement levels 2 what was the cause of the post world war ii baby boom and subsequent baby bust was the baby boom a one time aberration from a secular decline in fertility or can we expect substantial fluctuations in the birth rate in the future what are the consequences of the baby boom for the economic welfare of cohorts born during and after the boom 3 is the traditional family dead in the united states and other developed countries why did the divorce rate double in a decade why the growth in female headed households why do so many divorced fathers fail to support their children has the sexual division of labor within the family changed as a consequence of the growth of female labor supply to what extent are these changes in the family caused by social policy and to what extent are they a product of basic market forces associated with modern economic development what are the consequences of these changes for the welfare of future generations i attempt to touch on some issues from each of the three areas in which the questions are grouped however constraints imposed by limitations of space time and most imtdiscussants kenneth wolpin ohio state university robert pollak university of pennsylvania t paul schultz yale university

the effect of child support policies on visitations and transfers recent research on child support issues has been concerned with normative problems involvingthe distribution of welfare between divorced parents and their children as well as with the assess ment of the behavioral responses of parents to child support orders and custody arrangements see e g del boca and flinn 1995 gar nkel and klawitter 1990 bartfeldt and gar nkel 1996 del boca 1996 del boca and ribero 1998 and flinn 2000 while there is bynow an extensive literature analyzing the e ects of child support policies on monetary transfersof noncustodial parents and the extent of compliance with child support orders little researchhas been done on the relationship between monetary transfers between parents and the divisionof the child s time while income transfers to the custodial parent are no doubt importantfor the child s consumption and general well being there exists considerable empirical evidencesuggesting that the division of the child s time between the parents has important e ects on thechild s welfare beller and graham 1993 there have been few analyses of this relationship weiss and willis 1985 provide one theoretical motivation for the positive relationship betweenthe noncustodial parent s contact time with the child and their level of transfers they claimthat increased contact time allows better monitoring of the custodial parent s expenditures onthe child which induces higher levels of transfers to the custodial parent we have developed a model del boca and ribero 1999 in which visitations and childsupport are the outcomes of a negotiation process whereby the father exchanges income forvisitation time institutional agents such as judges state legislatures etc can impact thewelfareofthemembersofthenonintactfamilybyalteringtheendowmentsofeachofthe1

the efficiency of competitive equilibria in insurance markets with asymmetric information abstract this paper addresses the relationship between competitive equilibria and efficient allocations in an insurance market with asymmetric information using the definition of second best efficiency proposed by harris and townsend 1981 for environments characterized by informational assmmetry the efficiency properties of several proposed market equilibria are examined we find an analogue to the first optimality theorem a miyazaki wilson equilibrium always results in a second best allocation

in search for yield survey based evidence on bank risk taking abstract monetary policy can have an impact on economic and financial stability through the risk taking of banks falling interest rates might induce investment into risky activities this paper provides evidence on the link between monetary policy and bank risk taking we use a factor augmented vector autoregressive model favar for the us for the period 1997 2008 besides standard macroeconomic indicators we include factors summarizing information provided in the federal reserve s survey of terms of business lending stbl these data provide information on banks new loans as well as interest rates for different loan risk categories and different banking groups we identify a risk taking channel of monetary policy by distinguishing responses to monetary policy shocks across different types of banks and different loan risk categories following an expansionary monetary policy shock small domestic banks increase their exposure to risk large domestic banks do not change their risk exposure foreign banks take on more risk only in the mid 2000s when interest rates were too low for too long

does macro prudential regulation leak evidence from a uk policy experiment the regulation of bank capital as a means of smoothing the credit cycle is a central element of forthcoming macro prudential regimes internationally for such regulation to be effective in controlling the aggregate supply of credit it must be the case that i changes in capital requirements affect loan supply by regulated banks and ii unregulated substitute sources of credit are unable to offset changes in credit supply by affected banks this paper examines micro evidence lacking to date on both questions using a unique data set in the uk regulators have imposed time varying bank specific minimum capital requirements since basel i it is found that regulated banks uk owned banks and resident foreign subsidiaries reduce lending in response to tighter capital requirements but unregulated banks resident foreign branches increase lending in response to tighter capital requirements on a relevant reference group of regulated banks this leakage is substantial amounting to about one third of the initial impulse from the regulatory change

intra household allocation of resources inferences from non resident fathers child support payments a large proportion of divorced and separated fathers form new partnerships the new partner s preferences are not likely to put much weight on expenditures on the man s children from his previous union thus his own and his partner s income would have different impacts on his child support payments if partners relative incomes affect bargaining power in household decisions this article exploits within father variation in the british household panel survey 1991 2005 to estimate the impacts of the intra household income distribution on child support payments and the father s welfare we find that a higher share of father s income in household income increases the probability of paying child support and its amount relative to household income

fertility shocks and equilibrium marriage rate dynamics why did the marriage probability of single females in france after world war 1 rise 50 above its pre war average despite a 33 drop in the male female singles ratio we conjecture that war time disruption of the marriage market generated an abnormal abundance of men with relatively high marriage propensities our model of matching over the lifecycle when calibrated to pre war data and two war time shocks succeeds in matching the french time path under the additional assumption of a pro natalist post war preference shock we conclude that endogeneity issues make the sex ratio a potentially unreliable indicator of female marriage prospects

parental responses to child support obligations evidence from administrative data abstract we study parental responses to child support obligations using rich administrative data from denmark and variation in the child support formula we estimate that a 1000 dkk 160 increase in a father s obligation is associated with a 273 dkk 45 increase in his payment a higher obligation reduces father child co residence pointing to substitution between financial and non pecuniary investments further obligations increase post separation fertility among remarried fathers but have no impacts on maternal fertility or either parent s labor supply our findings suggest that government efforts to increase child investments through mandates on parents can be complicated by their behavioral responses to them

testing becker s prediction on assortative mating on spouses wages it is often believed that spouses wages are positively related even when other traits such as age and education are controlled this is mainly based on the observation of two earner couples this paper uses the standard sample selection technique to correct for the sample censoring and to compute potential wages for nonworking women using data from taiwan it is found that after accounting for sample censoring and cross productivity effects there is weak evidence that the partial correlation between spouses wages can be negative this lends first weak but direct support for

marriage squeeze marriage age and the household savings rate in china abstract recent influential papers claim that single men s saving competition for marriage intensified by an increase in the male to female ratio in the pre marital cohort explains 60 percent of the rise of china s aggregate household savings rate in this paper we analyze whether the marriage competition remains a first order effect on saving when another margin of adjustment to sex ratio imbalance men s postponement of marriage is considered we construct a theoretical and quantitative life cycle model with a frictionless marriage market where a single man s rank is determined by his wealth and age by calibration we find that with the option to postpone marriage the response of the aggregate savings rate to the rising sex ratio is dampened by 45 percent moreover the model generates an unusual downward sloping age savings rate profile with young households saving more than their middle aged counterparts as observed in the data

cohabitation marriage and divorce in a model of match quality the objective of this research is to further our understanding of how and why individuals enter and leave coresidential relationships we develop and estimate an economic model of nonmarital cohabitation marriage and divorce that is consistent with current data on the formation and dissolution of relationships jovanovic s journal of political economy 87 1979 972 90 theoretical matching model is extended to help explain household formation and dissolution behavior implications of the model reveal what factors influence the decision to start a relationship what form this relationship will take and the relative stability of the various types of unions the structural parameters of the model are estimated using longitudinal data from a sample of female high school seniors from the united states new numerical methods are developed to reduce computational costs associated with estimation the empirical results have interesting interpretations given the structural model they show that a significant cause of cohabitation is the need to learn about potential partners and to hedge against future bad shocks the estimated parameters are used to conduct several comparative dynamic experiments for example we show that policy experiments changing the cost of divorce have little effect on relationship choices

imperfect information and the equitability of competitive prices in many markets sellers have imperfect information about the costs of sales to different buyers and the pattern of competitive pricing depends on the information available in order to analyze the equity implications of public policies requiring information suppression non utilitarian measures of the horizontal and vertical dimensions of pricing inequity caused by cross subsidization are proposed and examined better information generally reduces vertical inequity but if information about buyers is initially poor additional imperfect information may increase horizontal inequity if information is initially good more information generally lowers both dimensions of inequity

a theory of prostitution prostitution is low skill labor intensive female and well paid this paper proposes a marriage market explanation to this puzzle if a prostitute compromises her marriage market prospects she will have to be compensated for forgone marriage market opportunities we discuss the link between poverty and prostitution and show that prostitution may decrease with male income if wives and prostitutes are drawn from the same pool of women we point to the role of male sex ratios and males in transit in sustaining high levels of prostitution and we discuss possible reasons for its low reputation and implications for marriage patterns

adverse selection and regulation in health insurance markets abstract in this paper we look at various ways to regulate the health insurance market and ask whether they provide an answer to the problem of adverse selection to avoid inefficiency government policy must either effectuate some cross subsidization of insurance policies within the state sector or grant private insurance firms an exclusive right to serve certain groups of the population recent reforms in the netherlands and germany and president clinton s proposals for the us could be adapted to fulfil these requirements efficiency cannot be achieved on the other hand if the regulator tries to prescribe cross subsidization within the private sector

differential fecundity and child custody abstract despite u s child custody laws favoring joint custody since the mid 1970s mother sole custody is still the main custody arrangement this paper proposes that differences in fecundity between men and women play a role in accounting for this fact men are more likely to have more children after a divorce because they are fertile for more years than women this acts as an incentive for couples to agree on mothers sole custody i build a general equilibrium model of endogenous marriage divorce and remarriage with differential fecundity between women and men where couples choose custody allocation custody depends on the fecundity differential and father s time spent with children i calibrate my model to be consistent with observed u s child custody arrangements and marriage statistics and using changes over time in assisted reproductive technology art and father s time spent with children i quantify the effect of the fecundity differential on child custody results show that if assisted reproductive technology was not available the current share of couples with joint custody would be 15 67 lower considering that fathers time with children has also changed over time i find that a reduction in the fecundity differential accounts for an increase in the share of couples with joint custody of 4

premium subsidies for health insurance excessive coverage vs adverse selection the tax subsidy for employment related health insurance can lead to excessive coverage and excessive spending on medical care yet the potential also exists for adverse selection to result in the opposite problem insufficient coverage and underconsumption of medical care this paper uses the model of rothschild and stiglitz r s to show that a simple linear premium subsidy can correct market failure due to adverse selection the optimal linear subsidy balances welfare losses from excessive coverage against welfare gains from reduced adverse selection indeed a capped premium subsidy may mitigate adverse selection without creating incentives for excessive coverage

on the emergence of toyboys the timing of marriage with aging and uncertain careers we explore how gender bias in career opportunities affects matching in a marriage market with search frictions and where an individual s fitness decays with age we document a being left on the shelf effect where young singles who find the marriage market rapidly thins with age rush into early partnership singles with stronger career opportunities however have a greater option value to defer marriage more equal career opportunities for women captured by greater schooling and better occupations potentially explain the recent emergence of toyboy unions in which the woman is at least 5 years older than her partner 2011 by the economics department of the university of pennsylvania and the osaka university institute of social and economic research association

child support and partnership dissolution this article studies the determinants of partnership dissolution and focuses on the role of child support we exploit the variation in child support liabilities and entitlements driven in part by the introduction of a new set of complex rules that determined child support liability in the uk and by their interaction with welfare rules our panel has the virtue that the post 1993 variation in child support liability for all couples in partnerships formed prior to 1993 is unanticipated we find strong evidence that the resulting large child support liabilities significantly reduced dissolution risks

the effects of redistributive taxation in credit markets with adverse selection abstract this paper studies the effects of redistributive taxation in credit markets with adverse selection and shows that there exists a range of taxes that creates pareto improvements relative to the zero tax market allocation by increasing aggregate investment for sufficiently high taxes an increase in the safe interest rate can be accompanied by an increase in investment

the effect of joint custody on family outcomes since the 1970s almost all us states have introduced a form of joint custody after divorce i analyze the causal effect of these custody law reforms on different family outcomes my identification strategy exploits the different timing of reforms across the us states estimations based on state panel data suggest that the introduction of joint custody led to an increase in marriage rates an increase in overall fertility including a shift from nonmarital to marital fertility and an increase in divorce rates for older couples accordingly female labor market participation decreased further male suicide rates and domestic violence fell in treated states the empirical evidence is consistent with the hypothesis that joint custody increased the relative bargaining power of men within marriage

the financial cycle and macroeconomics what have we learnt abstract it is high time we rediscovered the role of the financial cycle in macroeconomics in the environment that has prevailed for at least three decades now it is not possible to understand business fluctuations and the corresponding analytical and policy challenges without understanding the financial cycle this calls for a rethink of modelling strategies and for significant adjustments to macroeconomic policies this essay highlights the stylised empirical features of the financial cycle conjectures as to what it may take to model it satisfactorily and considers its policy implications in the discussion of policy the essay pays special attention to the bust phase which is less well explored and raises much more controversial issues

family specific investments and divorce with dynamically inconsistent households marital contracts and policy abstract this paper bridges two distinct areas of inquiry the economic theory of the family and behavioral research on time inconsistent preferences motivated by anecdotal and survey evidence suggesting that present bias plays a role in intra household decision making we propose a model in which hyperbolic discounting couples engage in home production activities thereby accumulating family specific capital over time at any given point in time the gains to continued marriage depend on the accumulated stock of this capital and a temporary random shock to match quality couples whose match quality deteriorates may choose to divorce and this is more likely to happen if past investments in family specific capital have been low we obtain three main sets of results first present biased preferences induce couples to underinvest in family specific capital and to overdivorce second sophisticated couples but not naive ones may choose to enter marriage on terms which make divorce more costly to obtain third the inefficiencies in the behavior of time inconsistent couples can be completely undone by means of earnings and divorce taxes that vary over the marital life cycle

in the name of the son and the daughter intergenerational mobility in the united states 1850 1940 this paper estimates historical intergenerational elasticities between fathers and children of both sexes in the united states using a novel empirical strategy the key insight of our approach is that the information about socioeconomic status conveyed by first names can be used to create pseudo links across generations we find that both father son and father daughter elasticities were flat during the nineteenth century increased sharply between 1900 and 1920 and declined slightly thereafter we discuss the role of regional disparities in economic development trends in inequality and returns to human capital and the marriage market in explaining these patterns jel d63 j12 j16 j24 j62 n31 n32 the degree to which economic status is passed along generations is key to under standing differences across societies and over time in the extent of inequality a low degree of intergenerational mobility can undermine the notion of equality of opportunity and may lead to persistent inequality recent research reveals that today intergenerational mobility in the united states is lower than in most other developed countries corak 2013 this finding stands in contrast with the national ethos of the united states as the land of unlimited opportunity was this view ever justified in this paper we provide a new perspective on the evolution of intergenerational mobility in the united states in the late nineteenth and early twentieth centuries we extend the existing literature by looking at the intergenerational elasticity in economic status between fathers and children of both sexes focusing only on father son cor relations may miss part of the picture daughters should be included if we want to know how the average well being of a generation correlates with that of their parents

effective macroprudential policy cross sector substitution from price and quantity measures macroprudential policy is increasingly being implemented worldwide key questions are its effectiveness in influencing bank credit and substitution effects beyond banking our results confirm the expected effects of macroprudential policies on bank credit both for advanced economies and emerging market economies but results also confirm substitution effects towards non bank credit especially in advanced economies reducing the policies effect on total credit quantity restrictions are particularly potent in constraining bank credit but also cause the strongest substitution effects policy implications indicate a need to extend macroprudential policy beyond banking especially in advanced economies

law property and marital dissolution this paper challenges the view that legal rights are not important in affecting whether people divorce but it puts as much emphasis on property rights given for example by the law on alimony as on dissolution rights in the united states the paper sets out two stylised models of marriage and examines the consequences of fuller compensation for economic sacrifices made during marriage if the dominant economic issue in a marriage is who undertakes household tasks then a law giving fuller compensation makes divorce more likely if the dominant issue is child custody divorce is less likely excerpt

advantageous effects of regulatory adverse selection in the life insurance market we analyse the effects of regulations prohibiting the use of information to risk rate premiums in a life insurance market new information derived from genetic tests is likely to become increasingly relevant in the future many governments prohibit the use of this information thereby generatingregulatory adverse selection in our model individuals early in their lives know neither their desired level of life insurance later in life nor their mortality risk but learn both over time we obtain both positive and normative results that differ qualitatively from those in standard static models legislation prohibiting the use of genetic tests for ratemaking may increase welfare the effort to sequence the human genome completely is now effectively com pleted although a comprehensive understanding of the effects of most genes on health and mortality risks will still take substantial further effort it is likely that in the medium term future more and more information relevant to ratemaking in the life health and long term care insurance markets will become available in particular we will learn the effects of many genes on the likelihood of various illnesses and consequently individualslife expectancy 1 moreover new genetic tests for these genes will likely become much cheaper 2 allowing this information to be used by insurers raises the prospect of substantial changes in future pricing

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

will you marry me a perspective on the gender gap abstract this paper develops a general equilibrium model of the gender wage gap the difference in earnings is a consequence of a demographic regularity that men tend to marry younger women which may limit women s labor mobility and hence their average earnings however couples are always free not to marry and do so only if it is in each s self interest the intrafamily allocation of resources is determined via non cooperative bargaining this leads to interesting interactions between the game played by husband and wife on the one hand and the competitive environment in which they are immersed on the other the predictions resulting from this model s interplay between locational choice and family bargaining are consistent with the observation that the increasing stress put by women on their careers over the past 30 years has been contemporaneous with reductions in both marriage rates and the gender gap the model provides insight into the consequences of this for the relative welfare of men and women as well as exploring its wider economic implications

macroprudential policy and bank risk abstract this paper investigates the effects of macroprudential policies on bank risk through a large panel of banks operating in 61 advanced and emerging market economies there are three main findings first there is evidence suggesting that macroprudential tools have a significant impact on bank risk second the responses to changes in macroprudential tools differ among banks depending on their specific balance sheet characteristics in particular banks that are small weakly capitalised and with a higher share of wholesale funding react more strongly to changes in macroprudential tools third controlling for bank specific characteristics macroprudential policies are more effective in a tightening than in an easing episode

accounting for age in marital search decisions spouse quality measured by educational attainment varies significantly with the age at which an individual marries peaking in the mid twenties then declining through the early forties interestingly this decline is much sharper for women than men meaning women increasingly marry less educated men as they age moreover quality has worsened for educated women over several decades while it has improved for men using a non stationary sequential search model we identify and quantify the search frictions that generate these age dependent marriage outcomes we find that single life utility is typically the dominant friction though college women in the 1950 and 1970 cohorts are affected even more by deteriorating suitor quality regardless of educational status individual choice as opposed to pure luck is pivotal in explaining marriage market outcomes earlier in life

marital division of labor with risk of divorce the role of voice enforcement of contracts it is assumed that emotional ties can be relied on to enforce implicit marital contracts by voice therefore in the present model divorce has economic consequences not only because the economies of scale from living together are destroyed but also because the scope for such voice enforcement is weakened moreover perhaps surprisingly i find that it is ambiguous how an increase in the probability of divorce influences predivorce allocation of time even when preferences are assumed to be homothetic

testing among models of intrahousehold resource allocation households are the locus for much economic decision making households function as producers investors in human and physical capital managers of risk and as consumers many resources are allocated within households and the effects of many policies depend on the dynamics of household decision making for example household decisions about allocating food among individual household members may determine who benefits from programs to improve health nutrition or welfare in many microeconomic studies the household is treated as an individual for analytical purposes in other words it is assumed that a household acts as a single entity with a single set of preferences recently however a number of economists have recognized that households are sites of conflict as well as cooperation and have begun to use new classes of models to explain how resources are allocated among household members this literature has especially improved our understanding of households in which income is not completely pooled in such a setting standard household models may offer misleading conclusions about the effects of policies on individual household members i this paper goes beyond recent surveys of intrahousehold issue by explicitly examining the assumptions predictions and empirical implications of different intrahousehold models in particular it analyzes empirical tests that distinguish among competing models by clarifying the similarities and differences among alternative models this paper also clarifies what has actually been demonstrated and what has not been demonstrated by previous empirical studies in so doing the paper points to specific topics in need of further research this paper is organized as follows section 2 analyzes the assumptions and predictions of each of the five main classes of intrahousehold resource allocation models section 3 describes empirical tests of these assumptions along with an analysis of empirical work that has been generated sections 4 and 5 discuss the questions that remain unanswered and directions for future research

household bargaining over fertility theory and evidence from malaysia we develop and test a model of household bargaining over fertility when transfers between spouses are possible the model makes precise how the fertility preferences of each spouse translate into fertility outcomes we show this depends on whether or not spouses can commit to their future actions within marriage if couples bargain with commitment fertility outcomes take account of both spouses fertility preferences and do not depend on the threat point in marital bargaining if couples bargain without commitment the influence of each spouse s fertility preference on fertility outcomes depends on the relevant threat point in marital bargaining and the distribution of bargaining power we test the models using household data from the malaysia family life survey this data set contains information on each spouse s desired fertility level as well as fertility outcomes we exploit differences in threat points in marital bargaining across ethnic groups to help identify the underlying bargaining model the evidence suggests couples bargain without commitment

can adequate child support be legislated responses to guidelines and enforcement i introduction in response to the high levels of poverty faced by children of divorced parents federal and state governments adopted a number of policies during the 1980s aimed at increasing child support awards and payments these laws required all states to have numerical child support guidelines to be used by parents who could not agree on their own and to increase state enforcement of delinquent child support awards implicit in much of the policy discussion about divorce is the assumption that within marriage parents will jointly act in the best interest of their children but that after divorce children may not be adequately provided for and legislative action is required in the extreme this view is represented by the stereotype of the deadbeat dad a term that describes a father who doesn t care enough about his children to continue any involvement with them either in terms of time or money similarly economic models often assume a noncooperative outcome in which the non custodial father will not provide what he did during marriage e g weiss and willis 1985 our article makes several contributions to the literature on the determinants of child support by absent fathers in contrast to almost all of the work on this topic that has been based on noncooperative models we develop a theoretical model in which some families may be able to achieve a cooperative outcome which increases the total resources available to children in particular our model identifies three different types of outcomes 1 cooperative and self enforcing 2 noncooperative and self enforcing and 3 noncooperative and state enforced each of these outcomes has different implications for the well being of children and for the level of government involvement in divorce settlements we then derive the conditions under which families can achieve each of these outcomes and we specifically model how policy variables affect whether or not a particular outcome is achieved the levels of payments and levels of compliance conditional on the type of outcome our empirical work provides reduced fo rm evidence that is consistent with a model that distinguishes these different types of outcomes and we find that policies can affect the type of outcome as well as the level of child support awards and payments section ii of this article provides background and motivations for our topic we develop a general theoretical framework in section iii and compare outcomes under assumptions of symmetric versus asymmetric information section iv incorporates the legal environment by modeling the impact of guidelines and state enforcement efforts on the probability the custodial parent cp will impose the guidelines the level of child support awards and the noncustodial parent s ncp s compliance in section v we interpret comparative statics section vi examines the determinants of reduced form models of the probability of a court ordered child support award and shows that the predictions of the model are consistent with data on the characteristics of divorce settlements and parental behavior for those with voluntary versus court ordered settlements a summary of the findings and policy implications concludes ii background and motivation in contrast to the marriage literature which predominately uses cooperative bargaining models the literature on divorce generally assumes that divorcing parents are unable to reach cooperative agreements for example weiss and willis 1985 model parental expenditures on children after divorce as a principal agent problem in which the absent father cannot verify the child expenditures made by the mother this problem of asymmetric information leads to an inefficient noncooperative outcome del boca and flinn 1995 also use a noncooperative model to examine the government s choice of compliance outcomes others have analyzed compliance with child support awards using an economics of crime framework beron 1988 beller and graham 1991 chambers 1979

the economics of child custody i develop a model of marriage in which spouses decide on investments in child quality during marriage and on the allocation of child custody should they divorce the custodial allocation determines the share of the marital surplus each spouse appropriates which in turn influences spouses investment incentives the custodial allocation therefore has both distributional and efficiency consequences i derive the equilibrium investments and optimal custodial allocation and identify three channels through which making divorce easier affects child welfare investments in child quality during marriage the likelihood of divorce and the allocation of custody if divorce occurs

how does the marriage market clear an empirical framework the paper surveys the choo and siow 2006a cs marriage matching model and its extensions cs derives a behavioural marriage matching function the collective model of intra household allocations can be integrated into this framework spousal labour supplies respond to changing marriage market conditions marriage market tightness the ratio of unmarried type i men to unmarried type j women is a sufficient statistic for marriage market conditions for those types of individuals the hypothesis that spousal labour supplies vary to equilibrate the marriage market has overidentifying restrictions the framework extends to a dynamic marriage matching environment empirically this paper shows how the famine caused by the great leap forward in sichuan affected the marital behaviour of famine born cohorts marriage market tightness is shown to be a useful statistic for summarizing marriage market conditions in the united states marriage market conditions in the contemporary united states primarily affect spousal labour force participation rather than hours of work ce texte examine le modele de choo et siow et ses extensions ce modele derive une fonction comportemental d arrimage sur le marche du mariage le modele d allocation intra menage des t ches peut s integrer a ce cadre d analyse les offres de travail des epoux repondent aux conditions changeantes du marche du mariage un marche du mariage serre un ratio d hommes celibataires de type i par rapport a un nombre de femmes celibataires de type j constitue une statistique suffisante pour etablir les conditions de marche de ces types d individus l hypothese que les offres de travail des epoux varient pour equilibrer le marche du mariage engendre des restrictions de sur identification le cadre d analyse couvre le cas d un environnement dynamique d arrimage empiriquement ce memoire montre comment la famine causee par le grand saut en avant de sichuan a affecte le comportement de mariage des cohortes qui en sort sorties on montre aussi que le caractere serre du marche du mariage aux etats unis fournit une statistique utile pour prendre le pouls des conditions du marche du mariage ces conditions dans le monde contemporain aux etats unis ont un impact sur la participation des epoux au marche du travail plutot que sur les heures travaillees

divorce and the cognitive achievement of children children of divorced parents exhibit lower test scores and educational attainment have these correlations a causal interpretation parents who divorce may be less likely to invest in their children while together or they may divorce to shield their children from the effects of marital conflict i study the relationship between children s achievement and the marital status of their parents within a dynamic framework in which partners decide on whether to remain married how to interact with or without conflict and child investments i then assess whether a child whose parents divorced would have been better off had divorce not occurred

canadian contributions to family economics canadian scholars have made substantial contributions to the relatively new field of family economics these include new models of how men and women match in marriage markets and of how decisions are made in multi person households several were early contributors to the literature on married women s labour supply and labour supply in a family context and helped to develop empirical methods in this area a particular focus has been on the impacts of policy relevant parameters such childcare costs on family labour supply and child well being new work on child development the impact of early life conditions and the processes of intergenerational transmission also highlight the importance of family context in determining economic well being

cross border marriage costs and marriage behavior theory and evidence this article analyzes cross border marriages between mainland china and hong kong hk we examine the effects of a reduction in cross border marriage costs following an increase in marriage migration quotas and the handover of hk to china we find that cross border marriages mainly involve men from the low tail of the hk attribute distribution we also find that hk women s position in the marriage market and within households deteriorated following the reduction in cross border marriage costs and that their disadvantaged position exerts an incentive effect on their labor market behavior these outcomes are consistent with our matching model

intra family distribution of paid work time this article analyses the intra family distribution of paid work time in five european countries france germany italy spain and the uk to that end we formulate a collective model which allows us to characterize the efficient labour supply decisions of each spouse this two equation model is then simultaneously estimated by using national panel data drawn from the european community household panel echp 1994 2001 empirical results clearly show that in all sample countries the labour supply of wives is affected by own wages household and own nonlabour incomes and the number of children whereas evidence for husbands differs across countries

on the age at marriage theory and evidence from jews and moslems in israel abstract in this paper we extend the becker keeley and bergstrom bagnoli theories of the optimal age at marriage and derive systematic cross cultural differences in the marriage pattern we then examine the empirical relevance of the hypotheses for jewish and moslem population groups in israel the empirical analysis is more detailed than previous studies by for example splitting the sample according to the wife s labor market status the evidence supports the becker keeley prediction about the effects of the spouses wage rates the bergstrom bagnoli prediction about the effect of the husband s wage rate in a traditional society and the additional hypotheses we propose

the efficiency effects of categorical discrimination in the insurance industry recent public policy debate has focused concern on the equity dimensions of categorical discrimination based on sex age or race in insurance and similar markets we consider the efficiency effects of such discrimination and establish that costless imperfect categorization always enhances efficiency when categorization entails a nonnegligible resource cost however no unambiguous efficiency ranking of informational regimes is possible when categorization is costless we demonstrate that government having no better information than market participants can effect redistribution without assuming dictatorial control of the market implying that a market equilibrium with costless categorization is potentially pareto superior to one without it when categorization is costly however the market may categorize when pareto improvements are not possible

expenditure decisions of divorced mothers and income composition in this paper we analyze the relationship between the income sources of custodial divorced parents and their expenditure patterns we use data from the consumer expenditure survey to directly investigate the issue of whether or not divorced mothers receiving child support income spend larger amounts on child goods than those not receiving child support holding total household income constant by comparing the estimated coefficients on child support income and other income in an endogenous engel curve specification we argue that we can classify child goods as being public or private and say something about the expenditure patterns of noncustodial fathers under a nash equilibrium model of parental expenditures on public child goods and some plausible assumptions regarding the manner in which child support transfer decisions are made by noncustodial fathers our empirical results indicate that income composition does affect the expenditure patterns of divorced mothers and that consumption externalities exist even among divorced parents

price regulation in insurance markets with asymmetric information abstract the paper presents and discusses a regulatory policy in insurance markets it is based upon a two sided rule each company must propose at least one contract with full coverage and a ceiling is imposed on the level of premiums

adverse selection in the marriage market hiv testing and marriage in rural malawi asymmetric information in the marriage market may cause adverse selection and delay marriage if partner quality is revealed over time sexual safety is an important but hidden partner attribute especially in areas where hiv is endemic a model of positive assortative matching with both observable attractiveness and hidden sexual safety attributes predicts that removing the asymmetric information about sexual safety accelerates marriage and pregnancy for safe respondents and more so if they are also attractive frequent hiv testing may enable safe people to signal and screen consistent with these predictions we show that a high frequency opt out hiv testing intervention changed beliefs about partner s safety and accelerated marriage and pregnancy increasing the probabilities of marriage and pregnancy by 26 and 27 percent for baseline unmarried women over 28 months estimates are larger for safe and attractive respondents conversely a single test intervention lacks these effects consistent with other hiv testing evaluations in the literature our findings suggest that an endogenous response to hiv risk may explain why the hiv aids epidemic has coincided with systematic marriage and pregnancy delays

differntial fecundity markets and gender roles women are fecund for a shorter period of their lives than men this paper investigates how differential fecundity interacts with marriage labor and financial markets to affect gender roles the main findings of the paper are as follows i fecund women are relatively scarce men will behave differently than women in response to this scarcity in the most fundamental way demand and supply conditions in the marriage market affect gender roles ii differential fecundity does not have any market invariant gender effect gender roles depend on the way in which marriage labor and financial markets interact iii gender differences in the labor market can occur without corresponding differences in labor market opportunities productivities in child rearing or social norms iv with uncertainty in human capital accumulation and no insurance against this uncertainty the model s predictions are consistent with observed gender roles

biological basics and the economics of the family many economic models of the family are based on a generic person one person two household or parent child family rather than their anatomically correct counterparts sons and daughters fathers and mothers and grandfathers and grandmothers these economic models can offer powerful insights into family behavior but also can leave certain patterns unexplained and neglect potentially important crosscurrents melding biological insights with family economics can cast new light on existing knowledge and open up novel paths for research for example study after study has found that putting family income in the hands of mothers rather than fathers tends to increase the consumption of children as noted in this journal in lundberg and pollak 1996 yet the way such results are usually described might strike a noneconomist as exceedingly circumspect economists point out that these findings reject the common preference model of household decision making in favor of one with independent decisionmaking spouses but usually make little mention of motherhood or fatherhood per se or consider the dramatic expansion of south african government pension programs in the early 1990s which put lots of extra money in the hands of grandparents many of whom lived with their grandchildren in a compelling and oft cited study duflo 2003 found evidence of pension spillovers to grandchildren but the most intriguing patterns were demographic pensions to maternal grandmothers redounded to the benefit of granddaughters economic analysis uncovers the income effects but turns out to be of little help for explaining why these particular gender effects predominated

implicit contracts a survey 7mplicit contracts resolve the distribution of uncertainty and utilization of specific human capital between risk averse workers and less risk averse firms incomplete contracts are required to yield involuntary layoffs in contract markets otherwise contracts are efficient and pareto optimal by construction there is a close relation between contract theory and neoclassical labor market theory contracts smooth consumption but increase the volatility of labor supply and labor utilization to demand disturbances because contractural insurance eliminates the income effects of socially diversifiable risks this result is similar to the intertemporal substitution hypothesis however the price mechanism in a contract is substantially different contracts embody a nonlinear two part pricing scheme the lump sum part allocates the income consumption consequences of risks and the marginal pricing part allocates production and labor utilization this implicit pricing mechanism is in all respects flexible though the observed average hourly wage combines both parts and may give the outward appearanceof rigidity furthermore the observed average wage rate in a contract does not reflect marginal conditions necessary for structural econometric estimation indivisibilities appear necessary to account for the split between work sharing and layoffs contracts with private information are also considered in the nonlinear pricing context this abstract was borrowed from another version of this item

the effect of incomes wages and afdc benefits on marital disruption this paper uses a choice based model to estimate the effects of a broad set of economic factors including afdc benefit levels husband s earnings and a woman s wage rate on the probability of marital dissolution we find that the probability of divorce is lower for marriages in which the husband s labor income is higher we also find that while afdc income has a substantial effect on welfare receipt by a divorced woman it has a relatively small effect on the probability that a married woman will become divorced finally we find no support for the hypothesis that rising wages for women have increased marital instability

child support welfare dependency and poverty female headed families have among the highest poverty rates of any major demographic group in the united states the purpose of this paperis to investigate empirically the effectiveness of current child support enforcement policies and to determine their role in reducing poverty and welfare dependency a special supplement to the april 1982 current population survey provides the data for the analysis the results indicate that child support enforce ment may represent an effective means for re ducing welfare program costs but isunlikely to have a dramatic effect on either welfare de pendency or poverty copyright 1986 by american economic association

should we write prenuptial contracts abstract a successful marriage requires for both parties to make investments in their relationship and marital assets how such assets would be divided if and when the parties divorce is an important factor determining each party s ex ante investment incentives using the incomplete contracting approach we characterize the optimal asset division rule one that provides the parties with the best investment incentives we then discuss the circumstances under which the spouses would agree in equilibrium to contract out state imposed rules governing the allocation of marital assets upon divorce we conclude by exploring the implications of our results in the context of various asset division rules currently discussed by policy makers

divorce remarriage and child support there is some evidence that children of divorced parents do not perform as well as comparable children in intact families but that this gap declines with the aggregate divorce rate we develop a model in which the higher expectations for remarriage associated with higher divorce rates can trigger an equilibrium in which divorced fathers make more generous transfers that benefit their children and the mother in the aftermath of divorce as a result the welfare loss of children from the separation of their parents can be lower when divorce and remarriage rates rise

family policy with non cooperative families we consider a non cooperative model of a family s time allocation between market work and providing a home produced family public good such as child care or care for the elderly the model predicts underprovision of the public good because of crowding out this does not necessarily warrant public provision in contrast to other approaches in family economics we find that attempts to redistribute between spouses may alter the final distribution within the marriage and that such a policy may be pareto improving we also find that some degree of progressivity of the income tax can be welfare improving

polygyny fertility and savings sub saharan africa has a high incidence of polygyny it is also the poorest region of the world in this paper i ask whether banning polygyny could play any role for development using a quantitative model of polygyny i find that enforcing monogamy lowers fertility shrinks the spousal age gap and reverses the direction of marriage payments polygyny leads to high bride prices to ration women which makes buying wives and selling daughters a good investment thus crowding out investment in physical assets for reasonable parameter values i find that banning polygyny decreases fertility by 40 percent increases savings by 70 percent and increases output per capita by 170 percent

the economics of fatherhood the growth of nonmarital fertility together with greatly increased divorce rates and an increased proportion of children living in femaleheaded households has provoked considerable alarm about the demise of the traditional family and concern about potentially harmful effects on the well being of women and children in this paper i briefly summarize recent attempts by myself and others to develop a coherent theoretical framework to integrate economic theories of fertility and marriage in order to better understand why the same men who play the breadwinner role within marriage may fail to support their children following a divorce or who despite the gains to marriage may prefer to father children out of wedlock rather than within marriage i argue that such behaviors of men can be understood within a framework that takes into account the selfinterests of both men and women as they interact within a given sexual or marital match and as they interact in a broader market for sexual and marriage partners at the level of a given match the theory provides hypotheses about the determinants of voluntary child support by fathers who are divorced from or have never married the mother it also suggests reasons why voluntary child support is likely to be inadequate and consequently provides some insight about the role of laws and administrative procedures designed to establish paternity determine the size of childsupport awards and enforce collection of awards at the level of the market under certain circumstances theory produces results similar to those emphasized by william wilson and katherine neckerman s 1987 theory of outof wedlock childbearing among the underclass

child support payment behavior an econometric decomposition growing concern about the cost to families and society from child support noncompliance has resulted in a flurry of scholarly articles and in welfare reform legislation addressing child support the attention has been drawn from reports showing that almost 2 3 million women of the 4 4 million owed support in 1985 did not receive all they were owed many receiving no payment at all 17 the implications of this are far reaching it is well known that over half of all female headed families have children in poverty and many of these families will end up drawing aid to families with dependent children payments child support could help shift the burden from general tax revenues to the responsible father for the family the benefits of additional income may result in reduced stress on the mother and less disruption in the lives of the children taking a longer run view greater family income has been linked to more years of schooling and higher wage rates in the early part of a child s career 7 higher payments of child support then may serve to increase current parental income and help reduce future poverty in this paper we use a more efficient estimator to model child support behavior than has been used the technique allows the extraction of more information from the data than previously has been possible in particular the marginal impact of changes in variables on the probability of being a nonpayer partial payer or full payer and on the expected amounts paid we show the usual practice of combining individuals who only pay a part of their order with those who pay all of their order into one group may lead to misleading policy conclusions the combining of these groups does give a sense of the total amount that can be collected across individuals often as important though are compliance issues centered on those not paying all of their support order while attention has been paid to those paying none of their order partial payers have been ignored in the literature in the course of our work we find support for the effectiveness of the federal child support enforcement program csep in increasing compliance with support

some evidence on the empirical significance of credit rationing this paper examines the credit rationing debate using detailed contract information on over one million commercial bank loans from 1977 to 1988 while commercial loan rates are sticky consistent with rationing this stickiness varies with loan contract terms in ways that are not predicted by equilibrium credit rationing theory in addition the proportion of new loans issued under commitment does not increase significantly when credit markets are tight despite the fact that borrowers without commitments can be rationed whereas commitment borrowers are contractually insulated from rationing overall the data suggest that equilibrium rationing is not a significant macroeconomic phenomenon

efficient responses to targeted cash transfers we estimate and test the restrictions of a collective model of household consumption using z conditional demands in the context of a large conditional cash transfer program in rural mexico the model can explain the impacts of the program on the structure of food consumption we use two plausible and novel distribution factors the random allocation of a cash transfer to women and the relative size and wealth of the husband s and wife s family networks our structure does better at predicting the effect of exogenous increases in household income than an alternative unitary structure we cannot reject efficiency of household decisions

the effects of in work benefit reform in britain on couples theory and evidence this paper examines the effects of the working families tax credit wftc on couples in britain we develop a simple model of household decisions which explicitly accounts for the role played by the tax and benefit system its main implications are then tested using panel data from the british household panel survey collected between 1991 and 2002 overall the financial incentives of the reform had negligible effects on a wide range of married mothers decisions such as eligible working at least 16 hours per week and full time employment working at least 30 hours per week employment transitions childcare use and divorce rates women s responses however were highly heterogeneous depending on their partners labour supply and earnings mothers married to low income men showed larger responses in employment especially if they had younger children they were more likely to remain in the labour force and had higher rates at which they entered it while more likely to receive the tax credit they also experienced a greater risk of divorce we find virtually no effect for women with higher income husbands likewise there are no statistically significant responses among married men