Ward-Batts, Jennifer. 2008. “Out of the Wallet and into the Purse: Using Micro Data to Test Income Pooling.” Journal of Human Resources 43(2): 325–351.
This paper uses an exogenous change in the intrahousehold distribution of income, provided by a change in United Kingdom Family Allowance policy to test the income-pooling hypothesis implied by unitary household models. Expenditure shares are estimated for a wide range of goods using household-level data. Shifts in expenditure shares suggest that children and mothers benefited at the expense of fathers when this policy change shifted income within households from men to women. Similar shifts are not found among married-couple households with no children. This paper refutes income pooling, and confirms and extends results in Lundberg, Pollak, and Wales (1997).
Jennifer Ward-Batts is an assistant professor of economics at Claremont McKenna College, California. She is indebted to Shelly Lundberg, Richard Startz, Robert Pollak, Terry Wales, Yoram Barzel, Elaina Rose, several anonymous referees, and numerous seminar participants for useful discussions and comments. She takes responsibility for all opinions and errors. She is grateful for support from an Alfred P. Sloan Doctoral Dissertation Fellowship while working on the earliest draft of this work, and to the Institute for Social and Economic Research at the University of Essex for their hospitality during recent work on this project. Material from the Family Expenditure Survey is Crown Copyright, has been made available by the Central Statistical Office (CSO) through the U.K. Data Archive, and has been used by permission. Neither the CSO nor the U.K. Data Archive bears any responsibility for the analysis or interpretation of the data herein. The data used in this article can be obtained by application to the U.K. Data Archive. SAS files to prepare the data can be obtained beginning October 2008 through September 2011 from Jennifer Ward-Batts, 500 E 9th St, Claremont, CA 91711, jennifer.ward-batts@cmc.edu.