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In this dissertation I examine family decision using theoretical and empirical analysis. I am interested in the different roles that the main decision makers in the family play in the common decision. The first chapter focuses on the family decision about the labor supply of the wife, the second, on family residential mobility and migration, and the second, on the determinants of marriage. The first chapter analyzes the labor supply of married and cohabiting women using the traditional (unitary) and the more recent collective models of household decision making. The unitary model assumes household-level utility function and budget constraint, while the collective model makes a less restrictive assumption that the household decisions are Pareto-optimal. I describe the structural model of collective household labor supply and consumption, based on the paper by Donni and Moreau (The Journal of Human Resources, 2007). This model assumes complete rigidity of the labor supply of married and cohabiting men: men’s hours of work are fixed, and depend not on their individual choices but on the presence of exogenous constraints in the labor market. The collective labor supply model incorporates the household consumption of a selected good, called the conditioning good, which is a measure of the distribution of the decision-making power within the household. I estimate the model using, in turn, three conditioning goods: food at home, clothing, and food at restaurants. The unitary labor supply model omits the conditioning good, because under the unitary model, the distribution of the decision-making power within the household does not affect labor supply. I test the unitary and the collective models of household decision making, and estimate the labor supply elasticities of married and cohabiting women. The estimation results, based on the data from the 2005, 2007, and 2009 Panel Study of Income Dynamics, are consistent with the collective model, but not with the unitary model. However, the labor supply elasticities of married and cohabiting women are not significantly affected by the choice of the model. The estimated hours wage elasticity of married and cohabiting women is between 0.08 and 0.14 in 2005, and falling over time, although this decline is not precisely estimated. The women’s hours income elasticity is between −0.12 and −0.07, and also declining in absolute value over 2004–2008. My results support the trend noticed in recent studies of a decline in labor supply responsiveness of married and cohabiting women to changes in their wage and family income. I conclude that women in U.S. couples are becoming similar to men in their labor supply behavior. The second chapter of the dissertation describes a collective model of family residential mobility that incorporate the distance of moving. I specify the model parametrically and develop predictions about the dependence of the probability of moving and the distance of moving on the characteristics of the couple and the distribution of bargaining power in the family. The empirical analysis is based on the restricted-use data on the census tract of residence of couples from the PSID for 1985–1991. The level of precision in the geographic location data allows me to differentiate between relocation and migration, and to determine the distance of moving. I define the distance of moving as the distance between the census tracts in which the family resides in two consecutive interview years. Relocation involves all moves between census tracts and migration involves moves over 10 miles that cross into a different political unit, such as a county, a metropolitan statistical area, and a core-based statistical area. The estimation of the model includes the proportion of asset income contributed by the wife as the distribution factor that reflects the wife’s bargaining power in the couple. I find that the wife’s proportion of asset income affects family residential mobility, controlling for the total asset income of the couple and the indicator of whether the family receives asset income. My results are inconsistent with the income pooling hypothesis of the unitary model. The wife’s proportion of asset income interacted with the education of the husband affects the distance of moving for relocating and migrating families, and the probability of relocation for working-age couples. Greater bargaining power of the wife reduces the positive effect that the husband’s education has on the probability of moving and the distance of moving. The third chapter of the dissertation is a time-series analysis of marriage rates during 1960– 2011. The marriage rate in the United States decreased over the last fifty years. This decrease was accompanied by a rapid growth in female earnings, compared to those of men, a growth in the female labor force participation, and a stagnation in the labor force participation of men. I use time-series analysis to determine whether economic factors contributed to the decline in marriages. I examine the outcomes of the model in light of the economic theory of marriage described by Becker, and more recent theories of the determinants and outcomes of marriage. The data include yearly marriage, divorce and birth rates, and labor force participation rates and median earnings for men and women for 1960–2011. I find that the series are nonstationary and exhibit a single cointegrating relation. The cointegrating relation can be interpreted as the longrun equilibrium relationship in the series. In the long-run the marriage rate is positively related to the labor force participation rates of men and women. I build a vector error correction model and estimate structural impulse responses. Impulse response analysis shows that a positive shock to female earnings decreases the marriage rate and increases the divorce rate. According to the 1960–2011 data, an independent increase in female earning decreases the likelihood of couples to marry and stay married.

ETD_7715

Ph.D.

Includes bibliographical references

by Elena Stolpovsky

doi:10.7282/T31N83GH

ETD doctoral

The author owns the copyright to this work.