Inferring Inequality with Home Production

No 24166, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We revisit the causes, welfare consequences, and policy implications of the dispersion in households' labor market outcomes using a model with uninsurable risk, incomplete asset markets, and home production. Accounting for home production amplifies welfare-based differences across households meaning that inequality in standards of living is larger than we thought. Home production does not offset differences that originate in the market sector because hours working at home do not covary with consumption and wages in the cross section of households and there are significant production efficiency differences in the home sector. The optimal tax system should feature more progressivity taking into account home production.

JEL-codes: D10 D60 E21 J22 (search for similar items in EconPapers)
Date: 2017-12
New Economics Papers: this item is included in nep-dge and nep-mac
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Citations: View citations in EconPapers (5)

Published as Job Boerma & Loukas Karabarbounis, 2021. "Inferring Inequality With Home Production," Econometrica, Econometric Society, vol. 89(5), pages 2517-2556, September.

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Related works:
Journal Article: Inferring Inequality With Home Production (2021)
Working Paper: Inferring Inequality with Home Production (2019)
Working Paper: Inferring Inequality with Home Production (2018)
Working Paper: Inferring Inequality with Home Production (2017)
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