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Review of Economics of the Household

, Volume 4, Issue 2, pp 99–111 | Cite as

Does the Representation of Household Behavior Matter for Welfare Analysis of Tax-benefit Policies? An Introduction

  • Olivier BargainEmail author
  • Miriam Beblo
  • Denis Beninger
  • Richard Blundell
  • Raquel Carrasco
  • Maria-Concetta Chiuri
  • François Laisney
  • Valérie Lechene
  • Nicolas Moreau
  • Michal Myck
  • Javier Ruiz-Castillo
  • Frederic Vermeulen
Article

Abstract

A widely shared intuition holds that individual control over money matters for the decision process within the household and the subsequent distribution of resources and welfare. As a consequence, there are good reasons to depart from the unitary model of the household and to explore the possibilities offered by models of the family accounting for several decision makers in the household and for the potential impact of tax reforms on the balance of power. This paper summarizes both the methodological and empirical findings presented in the next three papers of this special issue of the Review of the Economics of the Household. This series of contributions primarily entails a concrete comparison of the policy implications of the choice between the unitary and a particular multi-person representation: the collective representation. On the one hand, it suggests a methodology to implement the collective model of labor supply in a realistic context where participation is modeled together with working hours, and where the full tax-benefit system is accounted for. On the other hand, the empirical part relies on comprehensive simulations of tax reforms in Belgium, France, Germany, Italy, Spain, and the United Kingdom, and allows to quantify the distortions that may affect policy recommendations based on the unitary model.

Keywords

Collective model Household labor supply Intra household allocations Tax reform 

JEL Classification

D11 D12 J22 

Notes

Acknowledgements

This paper exploits work done in the one-year project “Welfare analysis of fiscal and social security reforms in Europe: does the representation of family decision processes matter?” , partly financed by the EU, General Directorate Employment and Social Affairs, under grant VS/2000/0778. We are grateful for comments and advice from the Editors, anonymous referees, François Bourguignon, Martin Browning, Pierre-André Chiappori, Olivier Donni, Andreas Krüpe, Jason Lee, Ernesto Longobardi, Isabelle Maret, Costas Meghir, Nathalie Picard, Hubert Stahn, Ian Walker and Bernarda Zamora, as well as participants in conferences and seminars too numerous to be quoted here. The usual disclaimer applies.

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Copyright information

© Springer Science+Business Media, LLC 2006

Authors and Affiliations

  • Olivier Bargain
    • 1
    • 2
    Email author
  • Miriam Beblo
    • 3
  • Denis Beninger
    • 3
  • Richard Blundell
    • 4
    • 5
  • Raquel Carrasco
    • 6
  • Maria-Concetta Chiuri
    • 7
    • 2
  • François Laisney
    • 3
    • 8
  • Valérie Lechene
    • 4
    • 9
  • Nicolas Moreau
    • 10
  • Michal Myck
    • 4
    • 11
  • Javier Ruiz-Castillo
    • 6
  • Frederic Vermeulen
    • 12
  1. 1.IZABonnGermany
  2. 2.CHILDTurinItaly
  3. 3.ZEWMannheimGermany
  4. 4.IFSLondonUK
  5. 5.UCLLondonUK
  6. 6.Universidad Carlos IIIMadridSpain
  7. 7.Universitá di BariBariItaly
  8. 8.BETA-ThemeULPStrasbourgFrance
  9. 9.Wadham CollegeOxfordEngland
  10. 10.GREMAQ and LIRHEToulouseFrance
  11. 11.DIWBerlinGermany
  12. 12.Tilburg UniversityTilburgNetherlands

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