Income pooling and the distribution of individual consumption among couples in Switzerland – IFZ Working Paper No 12/2009

Textbook models of household behavior assume that a household is a single decision unit that allocates time and money by maximizing a common utility function with respect to a common budget constraint. But households consist of individuals with distinct preferences. Household decisions are the result of a bargaining process with usually unequal bargaining power. If this collective view of household behavior is true the traditional tools used in the measurement of inequality, poverty and welfare may produce misleading results. In this paper we test the so-called income pooling assumption which postulates that redistributing income within the household does not change individual welfare. We also provide estimates of a more general collective household model. We use subjective income evaluation as measure for individual utility. Income pooling is rejected by our results. We find evidence for an unequal distribution of the bargaining power within the household, which depends on how much each spouse contributes to household income. Consequently, there is also an unequal distribution of consumption within the household.

Das Working Paper von Aline Bütikofer, Michael Gerfin und Gabrielle Wanzenried ist hier abrufbar.

Für das IFZ, Prof. Dr. Gabrielle Wanzenried, Projektleiterin, Dozentin und Koordinatorin Forschung