Family and inequality – FAMINEQ

The project is based on new models of household behavior and contributes to their development. In particular, collective models assume that each member of the household has their own preferences and that household decisions lead to Paretian efficiency. These models are essential for (a) understanding how better external opportunities for women have changed the balance of power within the household and (b) measuring changes in inequality at the individual level (not at household level as we usually do). Equally important, marriage market models explain mate choice decisions and help disentangle the respective roles of individual preferences and the aggregate distribution of potential mate characteristics. Another objective is to analyze how family characteristics determine the transmission of economic advantages between generations. More generally, the influence of family background on individual success and inequalities will be assessed using hitherto under-exploited data sources.es.

The project contributed to the development of collective models in order, in particular, to include children and measure inequalities at the individual level. This made it possible to qualify certain conclusions on the evolution of inequalities. For example, in the United Kingdom, inequality increased between households, but partially decreased within households, somewhat offsetting the overall trend. The project also contributed to the development of marriage market models. It has been shown that endogamy has tended to increase in various countries. Individuals with, in particular, similar incomes are more likely to form couples, contributing to reinforcing inequalities between households.

The project led to around twenty working papers, the majority of which have already been published in international peer-reviewed journals. Among these journals, we find some of the most prestigious in the field such as the Journal of Political Economy, Economic Journal, Journal of the European Economic Association or Review of Economics and Statistics. The research was also disseminated through two conferences organized in 2019 and 2022.

Aminjonov, U., O. Bargain, M. Colacce and L. Tiberti (2023): “Culture, Intra-household Distribution and Individual Poverty”, Economic Development and Cultural Chance, forthcoming.

Andreoli F., T. Havnes, and L. Lefranc (2019): “Robust inequality of opportunity comparisons: Theory and application to early-childhood policy evaluation”, Review of Economics and Statistics, 101, 355-369.

Andreoli F., A. Lefranc, and V. Prete (2020): “Rising educational attainment and opportunity equalization: Evidence from France”, Research on Economic Inequality, 28, 123-149.

Bargain, O. (2023): “Income Sources, Intra-household Allocation and Individual Poverty”, Review of Income and Wealth, forthcoming.

Bargain, O., O. Donni and I. Hentati (2022): “Resource sharing in families and Barten scale economies: theory and evidence from the UK”, Journal of the European Economic Association, 20, 2468–2496.

Bargain, O., G. Lacroix and L. Tiberti (2021): “Validating the collective model using direct sharing evidence”, The Economic Journal, 132, 865–905.

Browning M., O. Donni, and M. Gørtz (2021): “Do you have time to take a walk together? Private and joint time within the household”, The Economic Journal, 131, 1051–1080.

Chiappori P.-A., M. Costa Dias, S. Crossman, and C. Meghir (2020): “Changes in Assortative Matching and Inequality in Income: Evidence for the UK”, Fiscal Studies, 41, 39-63.

Ciscato E., A. Galichon, and M. Goussé (2020): “Like Attract Like? A Structural Comparison of Homogamy across Same-Sex and Different-Sex Households”, Journal of Political Economy, 128, 740-781.

Cowell F, and E. Flachaire (2022): “Inequality Measurement: Methods and Data”, Handbook of Labor, Human Resources and Population Economics, 1-46

Frémeaux, N., and A. Lefranc (2020): “Assortative mating and earnings inequality in France«, Review of Income and Wealth, 66, 757-783.

Frémeaux, N., S. Jung, and A. Lefranc (2023): “Assortative mating and inequality in South Korea”, Journal of Economic Inequality, forthcoming.

Galichon A., S. Kominers, and S. Weber (2019): “Costly Concessions: An Empirical Framework for Matching with Imperfectly Transferable Utility”, Journal of Political Economy 127, 2875-2925.

Galichon A., and B. Salanié (2022): ”Cupid’s Invisible Hand: Social Surplus and Identification in Matching Models (2022), Review of Economic Studies 89, 2600–2629.

Marcassa, A., J. Pouyet, and T. Trégouët (2020): “Marriage strategy among the European nobility”, Explorations in Economic History, 75, 101303.

Over the last 50 years, industrialized countries have undergone major economic and demographic changes that affected both the distribution of earnings across individuals and the family structure in which these individuals live. Since the 1970s, inequality in the distribution of individual income has significantly increased in most OECD countries. Over the same period, family structure and behavior experienced deep changes. First, changes in demographic behavior have led to the emergence of new family models: decline in marriage and birth rates, delayed transitions into cohabitation, rise in divorce rates and single parenthood. Second, gender inequality has narrowed significantly in both educational attainment and labor force participation, leading to a significant increase in the share of skilled employed women and affecting household composition. In spite of its importance, the interplay between these economic and demographic trends has remained largely unexplored. Our research project develops innovative empirical and theoretical research that allows understanding the different facets of the family-inequality nexus. From a theoretical perspective, the project will contribute to the development of collective models of household decisions and marriage market models. Collective models of the household assume that each household member has specific individual preferences and that collective decisions made by the household results from bargaining and/or cooperation between household members. Such models are essential to (a) understand how better opportunities for women may have modified the balance of power within the household and to (b) measure changes in welfare, and thus inequality, at the individual level that result from recent economic and demographic trends. They will be generalized to incorporate household scale economies and to account for children. On the other hand, marriage market models start from the distribution of men and women in the population with some characteristics and describe who marries whom and why. They allow disentangling the respective roles of the individual mating preferences and the aggregate distribution of potential partners’ characteristics in observed mating patterns. Finally, the project will also contribute to merge these two fields of research that are among the most dynamic in recent applied microeconomics. From an empirical perspective, the project will help reveal the fundamental mechanisms behind rising inequalities. One of the objectives is indeed to provide a comprehensive assessment of assortative mating in France and other countries, focusing not only on assortativeness by education and social origin but also by economic characteristics, in particular earnings and labor supply. Traditional reduced-form techniques but also more sophisticated structural-approaches based on marriage market models will be used to this end. Understanding mating behavior will therefore contribute to evaluate inequality between households. Another objective is to analyze how family characteristics determine the intergenerational transmission of economic advantages. Using collective models, it is possible to evaluate what parents spend for children. More generally, the influence of family background on individual success (measured by various indicators) and inequality will be evaluated using until now under-exploited data sources. The ultimate objective is to measure the changes in economic inequality in France and other comparable countries over the last decades, and go beyond state-of-the-art research by relying on more adequate models and better data. The project will focus on individual welfare (and not household welfare) and examine key stages of the production of inequality and its recent changes (changes in mating behavior and family composition, intergenerational transmission, changes in the intra-household balance of power.