Nonparametric Analysis of Household Labor Supply : Goodness-of-Fit and Power of the Unitary and the Collective Model

We compare the empirical performance of unitary and collective labor supply models, using representative data from the Dutch DNB Household Survey.We conduct a nonparametric analysis that avoids the distortive impact of an erroneously speci.ed functional form for the prefer-ences and/or the intrahousehold bargaining process.Our analysis focuses on the goodness-of-.t of the two behavioral models.To guarantee a fair comparison, we complement this goodness-of-.t analysis with a power analysis.Our results strongly favor the collective approach to modeling the behavior of multi-person households