Empirical Application of Collective Household Labour Supply Model in Iraq

Giovanis, E and Ozdamar, Oznur (2018) Empirical Application of Collective Household Labour Supply Model in Iraq. In: Working Paper. UNSPECIFIED. Economic Research Forum (ERF).

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Abstract

In this study we explore the determinants of the women’s labour supply and we attempt to identify the sharing rules for married couples. The analysis relies on data derived by the Iraqi Household Socio-Economic Survey (IHSES) in 2012-2013. The study considers the housework contributed by both spouses and we also include the disability status as a distribution factor. Moreover, we estimate the sharing rules accounting for female non-participation in the labour market. The household collective model is preferred over the unitary model as the results support that changes on wages, non-labour income, age, education, number of children and disability as a distribution factor affect the bargaining power and the share of spouses. The findings show that for a one per cent increase on female’s daily wage rate, her share on full income is increased by 1,250 Iraqi Dinar (ID) corresponding to $1.1, while is increased at 1,470 ID (1.25$) when the domestic labour is considered. Similarly, increases on the male’s wage increase her share by 600 ID (0.48$), while increases of 1 ID in the non-labour income increases female’s share by 0.42. The estimates show that the disabled women decrease the share by 1,135 ID (0.96$) more than the non-disabled ones reaching the 1,300 ID (1.1$) including the domestic labour supply. Therefore, considering disability as a distribution factor, besides the traditional factors of age, education and sex ratio, it can significantly influence the labour supply choices of the couples, their bargaining power and the intra-household resource allocation. Furthermore, the findings show that when the non-participation of the wife in the labour market is examined, her share and therefore bargaining power is lower than their married and earners counterparts.