We suggest a family bargaining model where human capital investment decisions are made non-cooperatively in a first stage, while day-to-day allocation of time is determined later through Nash bargaining, but with non-cooperative behaviour as the fall back. Several authors have claimed that non-cooperative behaviour is a more appropriate fall back in family bargaining than utilities as single. We argue that the empirical implications of the two approaches are quite parallel. A second finding is that over-investment in education may be even more of a problem in our mixed cooperative-non-cooperative model than in a fully non-cooperative one.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
1312.
Find related papers by JEL classification: D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
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