Essays in Household Economics

This dissertation contains three essays in applied microeconomics, with a focus on household decision-making.In the first chapter, I study the effect of asymmetric information about income on household decisions, resource sharing, and welfare. I proceed in four steps. In the first step, I develop a theoretical model that accounts for the possible existence of asymmetric information. The model predicts that households will partly mitigate the welfare cost of asymmetric information by incentivizing the wage earner to provide information about his or her true income. These incentives are provided by making the consumption share increase with reported income: the wage earner’s consumption share is high when reporting a high income and low when reporting a low income. Second, I derive a new non-parametric identification result for this model. Third, I estimate the model using a survey of Bangladeshi day laborers. The estimation confirms the predictions of the model, providing evidence that the households in the data are affected by asymmetric information. Finally, I conduct three counterfactual analyses to document how asymmetric information interacts with policies and compute the willingness to pay in each case.In the second chapter, which is co-authored with Maria Casanova and Maurizio Mazzocco, we show that the intratemporal and intertemporal preferences of each decision-maker in the household can be identified even if individual consumption is not observed. This identification result is used jointly with the Consumer Expenditure Survey (CEX) to estimate the intratemporal and intertemporal features of individual preferences. The empirical findings indicate that there is heterogeneity in intertemporal preferences between wife and husband.In the third chapter, I use a major reform of the parental leave system in Quebec in 2006 to analyze how households make decisions related to parental leave. I show that the introduction of a father’s quota - a policy designed to incentivize fathers to take parental leave - was successful in more than doubling the proportion of fathers taking some parental leave. However, the impact on the intensive margin was limited: in 80% of households, mothers take all the leave that is available to both parents. I also use an administrative dataset to analyze the relationship between parental leave decisions and income. In general, households with higher labor income take more parental leave overall (summing the mother’s and the father’s weeks). However, fathers with higher labor income take less parental leave