The cost of children: May the collective approach to household behavior help?

Abstract.

The collective approach to household consumption behavior tries to infer from variables supposed to affect the general bargaining position of household members information on the allocation of consumptions goods and tasks among them. This paper investigates the extension of previous work to the case where children may be considered as a public consumption good by the two adult members of a household. The main question being asked is whether it is possible to retrieve from the aggregate consumption behaviour of the household and the relative earnings of the parents information on the allocation of goods between them and children. This alternative approach to the estimation of the ‘cost of children’ is contrasted with the conventional approach based on a ‘unitary’ representation of and demographic separability assumptions on household consumption behaviour.