Non-Market Household Time and the cost of Children

in Journal of Business and Economic Statistics (2009), 27(1), 42-51

Raising children demands a considerable amount of parental time, obliging working parents either to reduce their leisure time further or to buy childcare services in the market. Parents may face ... [more ▼]

Raising children demands a considerable amount of parental time, obliging working parents either to reduce their leisure time further or to buy childcare services in the market. Parents may face additional opportunity costs upon deciding to participate in the labor market, but these are difficult to measure. Using a survey instrument in Belgium and Germany, we estimate the income compensation needed to maintain family well-being when adults work versus when they do not enter the labor market. In both countries we find that full-time working parents face extra child costs and require higher labor market participation compensation compared with childless adults. [less ▲]

On the Income Dependence of Equivalence Scales

in Journal of Public Economics (2005), 89(5-6), 967-996

Household consumption exhibits economies of scale as the number of household members increases. We collect survey data from two countries, Germany and France, in order to obtain direct subjective ... [more ▼]

Household consumption exhibits economies of scale as the number of household members increases. We collect survey data from two countries, Germany and France, in order to obtain direct subjective estimates of household consumption economies of scale, and, in particular, to examine an additional dimension: whether household consumption economies of scale change as living standards go up. Our data from both countries indicate strongly that household economies of scale increase as the living standard goes up. We discuss the robustness of our survey method and compare our results to these of alternative estimation methods in the literature. [less ▲]

On the Income Dependence of Equivalence Scales

Report (2004)

We suggest a simple survey method for obtaining direct subjective estimates of equivalence scales, also appropriate for testing whether equivalence scales depend on reference-household income. We ... [more ▼]

We suggest a simple survey method for obtaining direct subjective estimates of equivalence scales, also appropriate for testing whether equivalence scales depend on reference-household income. We implement our approach in two countries, Germany and France. In both countries independence of base is rejected. In particular, we find that equivalence scales depend negatively on reference income, an indication of increasing economies of scale in household consumption as living standards go up. Our estimation method is non-parametric, and it allows us to test generalized equivalence-scale exactness, which is not rejected in any of our samples. [less ▲]