The Impact of Tax-Benefit Reforms on Labor Supply in a Simulated Nash bargaining Framework - Archive ouverte HAL Access content directly
Journal Articles Journal of Family and Economic Issues Year : 2013

The Impact of Tax-Benefit Reforms on Labor Supply in a Simulated Nash bargaining Framework

Abstract

Several theoretical contributions, starting with McElroy and Horney (1981) and Manser and Brown (1980), have suggested to model househol d behavior as a Nash-bargaining game. Since then, very few attempts have been made to operationalize cooperative models of household labor supply for policy analysis. In this paper, we implement a Nash-bargaining model with external threat points (divorce) into the microsimulation of tax policy reforms in France. Following the suggestion of McElroy (1990) to achieve identification, we assume that the observation of single individuals can be used to predict outside options. Individual preferences in couples are allowed to display caring between spouses and are simulated in a way which guarantee consistency with the Nash bargaining setting, regularity conditions and observed behaviors. An extensive sensitivity analysis is provided in order to examine the various implications from using the cooperative model for tax policy analysis and the likely role of taxation on intra-household negotiation.
Not file

Dates and versions

hal-01691912 , version 1 (24-01-2018)

Identifiers

  • HAL Id : hal-01691912 , version 1

Cite

Nicolas Moreau, Olivier Bargain. The Impact of Tax-Benefit Reforms on Labor Supply in a Simulated Nash bargaining Framework. Journal of Family and Economic Issues, 2013. ⟨hal-01691912⟩
76 View
0 Download

Share

Gmail Facebook Twitter LinkedIn More