Public Economics and the Household

Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Figures......Page 9
Tables......Page 11
Preface......Page 13
1.1 Introduction......Page 15
1.2 Labour supply and household production......Page 18
1.3 Household income and welfare rankings......Page 28
1.4 Conclusions......Page 32
2.2 The standard consumer model......Page 34
2.3 The Becker model......Page 37
2.4 The Pollak and Wachter critique......Page 40
2.5 Market substitutes, implicit prices and the value of household production......Page 44
2.6 Conclusions......Page 48
3.1 Introduction......Page 50
3.2.1 Samuelson’s theorem......Page 53
3.2.2.1 Symmetry......Page 58
3.2.2.2 Anonymity and pooling......Page 59
3.2.3.1 Household production......Page 61
3.2.3.2 Children and child care......Page 72
3.2.3.3 Generalising the household welfare function......Page 75
3.2.4.1 Nash bargaining......Page 81
3.2.4.2 Nash bargaining with non-cooperative threat points......Page 83
3.2.4.3 The collective model......Page 86
3.3 Non-cooperative models......Page 89
3.4 Equilibrium models......Page 94
3.5 The Pareto property and Pareto (in)efficiency......Page 95
3.5.2 The non-commitment case......Page 98
4.2.1 The theoretical underpinning......Page 102
4.2.2 Models with fixed labour supplies......Page 106
4.3.1 Comparison of the ‘exchange’ and ‘transfer’ models of the household......Page 108
4.3.2 Estimating the costs of children......Page 110
4.4 Empirical work on the collective model......Page 115
4.5 Conclusions......Page 122
5.2 Life cycle models......Page 123
5.2.1 Endogenous labour supply......Page 127
5.2.2 Imperfect capital markets......Page 130
5.2.3 Uncertainty......Page 134
5.2.3.1 Prudence and precautionary saving......Page 136
5.2.3.2 Prudence and liquidity constraints......Page 138
5.2.3.3 Buffer stock saving......Page 139
5.2.4 Demographics......Page 142
5.3.1 Consumption and time allocation over the life cycle......Page 143
5.4 Evidence on family life cycle profiles......Page 149
5.4.1 Time-use and household expenditure survey data......Page 150
5.4.2 The life cycle defined on age of head of household......Page 151
5.4.3 The life cycle defined on children......Page 153
5.4.4 The average household......Page 154
5.4.5 Within-phase heterogeneity......Page 160
5.4.6 Empirical specification of a model......Page 163
5.4.7 Intertemporal profiles of consumption......Page 165
5.5 Conclusions......Page 169
6.1 Introduction......Page 171
6.2 Taxation systems......Page 172
6.3 The simple analytics of redistributive tax systems......Page 177
6.3.1 Linear taxation......Page 178
6.3.2 Nonlinear taxation......Page 180
6.3.3 Piecewise linear taxation......Page 183
6.3.3.1 Universal benefits, means testing and convexity......Page 189
6.3.4.1 Linear taxation......Page 190
6.3.4.2 Household production and female labour supply heterogeneity......Page 192
6.3.4.3 Piecewise linear taxation and the price of market child care......Page 193
6.4 Income tax systems in practice......Page 195
6.4.1 Formal income tax systems: MTRs and ATRs by primary income......Page 197
6.4.2 Effective MTRs and ATRs by primary income......Page 200
6.4.3 Effective MTRs and ATRs by household income......Page 204
6.4.4 Effective ATRs on second earner’s income......Page 206
6.5 Conclusions......Page 208
7.1 Introduction......Page 216
7.2 Taxation and the within-household income distribution......Page 218
7.3.1 The Boskin–Sheshinski model......Page 222
7.3.2 Optimal linear taxation and household production......Page 226
7.4 Piecewise linear taxation......Page 228
7.4.1 Solutions to the household choice problem......Page 229
7.4.2 The optimal convex joint tax system......Page 231
7.4.2.1 Taxation of individual incomes......Page 233
8.2 The two-type case......Page 235
8.3 A continuum of types......Page 248
8.4 Two-person households......Page 260
9.1 Introduction......Page 268
9.2 Tax reform policies......Page 270
9.2.1 Tax reform with no wage dispersion......Page 272
9.2.2 Tax reform with wage dispersion......Page 282
9.3 Tax reform, joint taxation and the tax unit......Page 286
9.3.1 Substitute time inputs......Page 287
9.4 Conclusions......Page 289
Bibliography......Page 291
Index......Page 300