Volume 25, Number 4 (Fall) 1990
Schultz, T. Paul. 1990. "Testing the Neoclassical Model of Family Labor Supply and Fertility." Journal of Human Resources 25(4):599-634.
The McElroy-Horney Nash-bargaining model of family demand behavior relaxes the restriction that nonearned income of husband and wife has the identical effect on family labor supply and commodity demands. This restriction of the neoclassical model of family behavior is tested for the determination of husband and wife labor supply and fertility based on the 1981 Socioeconomic Survey of Thailand. The neoclassical restriction is rejected for female labor supply and fertility. Another unexplored limitation of family demand studies, due to the sample self selection of intact marriages, is empirically treated through alternative estimation strategies. In this case, a more sharply focused theory of marital behavior is needed to identify family demand models.
The author is a professor of economics at Yale University. A draft of this paper was presented at meetings of the Population Association of America in Baltimore, MD, on March 30, 1989 and at workshops at Yale, Brown, and VPI. The research underlying this paper has been partially supported by the Women in Development Division, Population and Human Resource Division of the World Bank. The author appreciates in particular the comments of J. Berhman, B. Herz, S. Khandkar, J. Strauss, D. Thomas, and the computational assistance of P. McGuire. Permission to study these Thai surveys was generously granted by Dr. Duangchai Poomchusri of the Thailand National Statistical Office.
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