The Effects of Male and Female Labor Supply on Commodity Demands.

The authors examine the effects of male and female labor supply on household demands and present a simple and robust test for the separability of demands from labor supply. Using data on individual households from six years of the U.K. Family Expenditure Survey, they estimate a demand system for seven goods that includes hours and participation dummies as conditioning variables. Allowance is made for the possible endogeneity of theses conditioning labor-supply variables. The authors find that separability is rejected. Furthermore, they present evidence that ignoring labor supply leads to bias in the parameter estimates. Copyright 1991 by The Econometric Society.