This paper applies the theory of relational contracts to make precise the idea that because households are engaged in a repeated non-cooperative game, Pareto efficient outcomes can be supported by self interest, given the specific pattern of specialisation and exchange which exists in the...

This paper asks whether the gap in subjective happiness between spouses matters per se, i.e. whether it predicts divorce. We use three panel databases to explore this question. Controlling for the level of life satisfaction of spouses, we find that a higher satisfaction gap, even in the first...

Using Norwegian registry data we investigate how paternity leave affects fathers' long-term earnings. In 1993 Norway introduced a paternity quota of the paid parental leave. We estimate a difference-in-differences model which exploits differences in fathers' exposure to the paternity quota. Our...

Given that young children are under the control of their parents, if the government has an interest in either the welfare or the productivity of the former, it has no option but to act through the latter. Parents are, in the ordinary sense of the word, the government’s agents. They are agents...

There is a large empirical literature on policy measures targeted at children but surprisingly very little theoretical foundation to ground the debate on the optimality of the different instruments. In the present paper, we examine the merit of targeting children through two general policies,...

This paper formulates a model to examine the effects of changes in tax-benefit policy on the behavior of divorced parents and the well-being of children in single-parent households. Noncustodial parents choose the level of a child support payment to transfer to custodians. These, in turn, decide...

Using a collective model of consumption, we characterize optimal commodity taxes aimed at targeting specific individuals within the household. The main message is that distortionary indirect taxation can circumvent the agency problem of the household. Essentially, taxation should discourage less...

Social insurance is often linked to marriage. I model how such linkage affects the marriage market, and exploit Sweden's elimination of survivors insurance to demonstrate economically important responses along several behavioral margins in this market. Entry into marriage reflects a demand for...

This paper analyses optimal piecewise linear tax systems for two-earner households, based on joint and individual incomes respectively. It models the interaction between wage rates and variation in child care prices and productivities as determinants of across-household heterogene- ity in second...

We provide a critique of the standard methodology which bases welfare comparisons between households on deflating household income and consumption by an equivalence scale. We argue that this leads to support for tax/transfer policies that significantly disadvantage low to middle in-come...