Labor Supply and Inequality within Families (LIFE)
Name of applicant
Thomas Jørgensen
Title
Associate Professor
Institution
University of Copenhagen
Amount
DKK 4,839,724
Year
2022
Type of grant
Semper Ardens: Accelerate
What?
Most economic activity involves decisions within families. Families are complex dynamic units that often but not always involve decision making of two members in coordination. Inequality in the bargaining power and resources within families can e.g. have profound implications for how people save for old age, participate in labor market work, and allocate time between free-time and child care. The tax and transfer system, such as childcare provision and parental leave, can therefore have important implications for labor supply and inequality within families. LIFE will fill a research gap and investigate how tax and transfer policies can affect labor supply and inequality within families.
Why?
Rising inequality is a global concern and many economic policy proposals are partly evaluated on their impact on inequality measures. This does not include intra-household inequality, however. More than 50% of OECD households are couples, and understanding intra-household inequality is thus key in understanding inequality in general and gender inequality in particular. Thus, LIFE will contribute with new research on how public policy can shape inequality within families and thus in society as a whole.
How?
LIFE will develop further the next generation of economic models, focusing on dynamic bargaining of individuals in couples in a dynamic environment. Using empirical data on savings, labor market work, childcare usage, time allocation and marriages and divorces, we will validate the appropriateness of our proposed economic laboratory. Using our framework, LIFE will investigate how not yet implemented tax and transfer policies is likely to affect the economic activity and inequality within families.