Testing the Neoclassical Model of Family Labor Supply and Fertility

The McElroy-Horney Nash-bargaining model of family demand behavior relaxes the restriction that nonearned income of husband and wife had the identical effect on family labor supply and commodity demands. This restriction of the neoclassical model of family behavior is tested for the determination of husband and wife labor supply and fertility based on the 1981 Socioeconomic Survey of Thailand. The neoclassical restriction is rejected for female labor supply and fertility. Another unexplored limitation of family demand studies, due to the sample self selection of intact marriages, is empirically treated through alternative estimation strategies. In this case, a more sharply focused theory of marital behavior is needed to identify family demand models.