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Consumption and the Within-household Income Distribution: Outcomes from an Australian "Natural Experiment"

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  • Bruce Bradbury

Abstract

Does the within-household distribution of income influence household consumption patterns? In one attempt to answer this question, Lundberg, Pollak and Wales (1997) exploited the ‘natural experiment’ of a change in family benefits in the UK. They found that the within-household income distribution did have a significant impact on expenditure. This paper exploits a similar natural experiment in Australia. During the 1990s, unemployment benefits for unemployed married couples changed from being paid almost entirely to husbands, to being paid primarily to wives. Using household expenditure data it is found that, although the changes in the within-household income distribution were large, the changes in expenditure patterns were small and not in the expected direction. The data do not, therefore, provide support for the hypothesis that women's control over household expenditure was increased. The paper concludes with a discussion of the possible reasons for this. (JEL J10, J12, I38)

Suggested Citation

  • Bruce Bradbury, 2004. "Consumption and the Within-household Income Distribution: Outcomes from an Australian "Natural Experiment"," CESifo Economic Studies, CESifo Group, vol. 50(3), pages 501-540.
    • Handle: RePEc:oup:cesifo:v:50:y:2004:i:3:p:501-540.
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    File URL: http://hdl.handle.net/10.1093/cesifo/50.3.501
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    Citations

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    Cited by:

    1. Marieka Klawitter, 2008. "The effects of sexual orientation and marital status on how couples hold their money," Review of Economics of the Household, Springer, vol. 6(4), pages 423-446, December.
    2. Bargain, Olivier & Moreau, Nicolas, 2006. "Effets d’une réforme fiscale sur l’offre de travail des ménages dans un cadre collectif simulé," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(1), pages 207-246, mars-juin.
    3. Antonella Caiumi & Federico Perali, 2015. "Who bears the full cost of children? Evidence from a collective demand system," Empirical Economics, Springer, vol. 49(1), pages 33-64, August.
    4. Olivier Bargain, 2008. "Normative evaluation of tax policies: from households to individuals," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(2), pages 339-371, April.
    5. d’ASPREMONT, Claude & DOS SANTOS FERREIRA, Rodolphe, 2009. "Household behavior and individual autonomy," LIDAM Discussion Papers CORE 2009022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. Karen Mumford & Antonia Parera‐Nicolau & Yolanda Pena‐Boquete, 2020. "Labour Supply and Childcare: Allowing Both Parents to Choose," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(3), pages 577-602, June.
    7. Jennifer Ward-Batts, 2008. "Out of the Wallet and into the Purse: Using Micro Data to Test Income Pooling," Journal of Human Resources, University of Wisconsin Press, vol. 43(2), pages 325-351.
    8. Martin Dooley & Ellen Lipman & Jennifer Stewart, 2005. "Exploring the Good Mother Hypothesis: Do Child Outcomes Vary with the Mother's Share of Income?," Canadian Public Policy, University of Toronto Press, vol. 31(2), pages 123-144, June.

    More about this item

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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