Volume 29, Number 3 (Summer) 1994
Barmby, Tim. 1994. "Household Labor Supply: Some Notes on Estimating a Model with Pareto Optimal Outcomes." Journal of Human Resources 29(4):932-940.
This paper estimates a Pareto optimal model of household labor supply. It incorporates individual data to identify own-preference parameters. The paper also argues that specifying the parameter which weights utilities within the household as a function of household characteristics completes identification, and follows directly from the set up of the Pareto problem. Robustness checks are carried out with respect to the flexibility of the utility index. Individual data is incorporated in two ways; firstly by equating own-preference parameters, and secondly, by equating the marginal rate of substitution of goods for leisure.
The author wishes to thank Tapan Biswas, Peter Dolton, Peter Kooreman, Dan Seidmann, John Treble, Simon Vicary, and anonymous referees for helpful comments and encouragement. Thanks also to seminar participants at Bangor, Hull, Murdoch and Newcastle-upon-Tyne, and also conference participants at the 1990 EMRU Labor Study Group held at Loughborough. The ESRC data archive provided the data. Support under ESRC grant H519255006 is acknowledged. The author takes responsibility for all errors. The data used in this article can be obtained beginning in November 1994 through October 1997 from the author at, Department of Economics, University of Newcastle-upon-Tyne, Newcastle-upon-Tyne, NE1 7RU, England.
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