THE SPANISH SHARING RULE* Bernarda Zamora - Ivie

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THE SPANISH SHARING RULE Bernarda Zamora ABSTRACT In this paper we estimate the intrahousehold distribution of household’s private expenditures between men and women (the sharing rule) in two types of Spanish households: those in which the woman works and those in which the woman does not work. The results for working women are parallel to those obtained for other countries which indicate a proportionally higher transfer from the woman to the man than from the man to the woman, such that the proportion of the woman’s share decreases both with the woman’s wage and with the man’s wage. However, in households where the woman does not work, we observe a slight increase in the proportion of the woman’s share when the man’s wage increases. KEYWORDS: Collective model, Intrahousehold allocation, Woman’s participation, Engel curve. JEL codes: D11, J22 2
1. Introduction When we try to sort out what goes on inside Spanish households, we face several theoretical and data problems. At the theoretical level, the traditional unitary model considers the household as a single agent that maximizes an objective function under a budget constraint in which all incomes are pooled together. As such, the unitary model cannot be employed to recover individual preferences or the intrahousehold distribution of resources. In contrast, Chiappori’s (1988) collective model recognizes that the household is composed of at least two agents, the couple, who may well have different preferences. Under the assumption that households agree upon Pareto-efficient allocations, the collective model has testable implications for household behavior. Furthermore, in this framework, it is possible to recover individual preferences, as well as the sensitivity of the intrahousehold distribution of resources (the so-called sharing rule) to changes in each individual’s wage and other variables. Regarding the collection of data on Spanish couples, only commodity demands and each partner’s labor participation decisions are observed, but not so their labor supplies. Therefore, the standard labor supply collective model is not applicable. In its place, we adapt the Browning et al. (1994) commodity demand collective model to study households in which the man works full-time and the woman is allowed to work either full-time or not at all. The identification of the sharing rule relies on the observability of some individual behavior within the household. Collective models can be classified into two groups, depending on the sort of individual behavior that is supposed to be observable: labor supply collective models and commodity demand collective models. In the first group, labor supply collective models, the sharing rule defines the woman’s share of non-labor income as a function of man’s and woman’s wages and non-labor income itself. There are different approaches to identify the effect of such variables on the sharing rule. First, the standard collective model (Chiappori, 1988, Fortin y Lacroix, 1997) refers to the case in which,
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Page 23 and 24: References Arévalo, R., M.T. Carde

THE SPANISH SHARING RULE* Bernarda Zamora - Ivie

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