Household Sharing and Commitment: Evidence from Panel Data on Individual Expenditures and Time Use

We find that relative wages have a strong impact on the wife's weight in the household problem at the time of marriage. We also find that, during marriage, unpredicted deviations in the relative wage impact on this weight, but the magnitude is substantially smaller, and is only statistically significant for large realizations. These results are consistent with a model of household behavior in which husbands and wives remain committed to allocations agreed at the time of marriage, and only renegotiate in the face of binding participation constraints. Interestingly, the share of total consumption expenditure is essentially invariant to the wage share. The mix of husband and wife's hours in home production is affected by the wage share only through relative prices, but not directly through the household weight on the wife's utility.