Discussion paper
DP19587 Heterogeneous preferences, spousal interaction, and couples' time-use
We study the role of heterogenous preferences at the spousal level and that of spousal mutual insurance against wage shocks for couples’ labor supply in a time-use model. We estimate the model for couples in the German Time-Use Survey with Bayesian techniques and generate gender-specific wage-elasticities of market hours in the cross-section and for all couples. Missing mutual insurance ignores males’ behavior which we find to be substantial. Together with preference heterogeneity it shapes the elasticities’ size and distribution, especially for high and low hours worked and wage groups. Our setting is suitable to analyze nonlinear and distributional economic policy.
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