Do Husbands and Wives Pool Their Resources?: Evidence from the United Kingdom Child Benefit

JOURNAL OF HUMAN RESOURCES, Vol. 32, No. 3, Summer 1997

Posted: 2 Jul 1997

See all articles by Shelly J. Lundberg

Shelly J. Lundberg

University of California, Santa Barbara (UCSB); IZA Institute of Labor Economics; University of Bergen - Department of Economics

Robert A. Pollak

Washington University in St. Louis - John M. Olin Business School; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Terence J. Wales

University of British Columbia

Abstract

Common preference models of family behavior imply income pooling, a restriction on family demand functions such that only the sum of husband's income and wife's income affect the allocation of goods and time. Testing the pooling hypothesis is difficult because most family income sources are not exogenous to the allocations being analyzed. In this paper, we present an alternative test based on a "natural experiment"--a policy change in the United Kingdom that transferred a substantial child allowance to wives in the late 1970s. Using Family Expenditure Survey data, we find strong evidence that a shift toward greater expenditures on women's clothing and children's clothing relative to men's clothing coincided with this income redistribution.

JEL Classification: D10, J12, D12

Suggested Citation

Lundberg, Shelly J. and Pollak, Robert A. and Wales, Terence J., Do Husbands and Wives Pool Their Resources?: Evidence from the United Kingdom Child Benefit. JOURNAL OF HUMAN RESOURCES, Vol. 32, No. 3, Summer 1997, Available at SSRN: https://ssrn.com/abstract=8604

Shelly J. Lundberg (Contact Author)

University of California, Santa Barbara (UCSB) ( email )

Santa Barbara, CA 93106
United States

IZA Institute of Labor Economics

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University of Bergen - Department of Economics ( email )

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Robert A. Pollak

Washington University in St. Louis - John M. Olin Business School ( email )

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National Bureau of Economic Research (NBER)

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CESifo (Center for Economic Studies and Ifo Institute)

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IZA Institute of Labor Economics

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Germany

Terence J. Wales

University of British Columbia ( email )

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Canada
604-822-2092 (Phone)
604-822-5915 (Fax)

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