Lecture notes
ECON0115 Week 1
- Module
- Economics (ECON0115)
- Institution
- University College London (UCL)
In depth notes on ECON0115 Week 1
[Show more]
Seller
Follow
Content preview
Week 1Income pooling
Intro
The importance of family as a productive unit has declined sharply due to changes such as:
• The ease of entering and exiting marriage
• Contraception
• Low child mortality
• Ability to have children outside of marriage
Under traditional economic theory children are public goods for the parents
With regards to roles of the sexes comparative advantage is employed:
• If the mother’s ratio of productivity at home relative to market wage exceeds that of the father
then she will raise the child
• The partners can then divide the gains in total output caused by specialisation
Neoclassical framework explains:
• The increase in female labour supply and decrease in fertility due to increase in opportunity cost
of women’s time in non market production as wages rose
• The correlation of child wage rates and make wage rates positively with fertility and negatively
with women’s market participation in agricultural societies where unskilled child labour is a
valuable family resource
There is high correlation in the school attainments if husbands and wives as they are complements,
this is assortative matching (marriage between people with similar characteristics)
As spouses in marriage care about each other and their children, but may have con icting interests
two models emerged
UNITARY MODEL COLLECTIVE MODEL
poolingoccurs impliesneutralizationof Gcooperative solutionthatrequiresbinding
orinformally
targetedtransfers i commitmentsenforcedformally
t
onlythe
sumofincome c ontrol the
individualwould
r esourcesresourcesthe
Partible if marriage
the
effectschoicesnot 1
distribution income naanottormenorietneyweretodivorceincreaseb argainingpower
betweenthem of
MaxUlaae
are
sit pig y I atly.ge
i ifthereispooling
a t.ly.pi.pl
i
then
EyEj
NB: spouses having the same preferences does NOT mean they pool resources, as unless
preferences are homothetic, marginal choices di er depending on income distribution
Data
Variation in microeconomic data occurs due to di erences in preferences, characteristics,
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller zctpfru. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £7.16. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
66579 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now