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Journal Article
Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit
Shelly J. Lundberg, Robert A. Pollak and Terence J. Wales
The Journal of Human Resources
Vol. 32, No. 3 (Summer, 1997), pp. 463-480
Published
by: University of Wisconsin Press
DOI: 10.2307/146179
https://www.jstor.org/stable/146179
Page Count: 18
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Topics: Children, Tax benefits, Husbands, Women, Childrens clothing, Wives, Unearned income, Income taxes
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Abstract
Common preference models of family behavior imply income pooling, a restriction on family demand functions such that only the sum of husband's income and wife's income affects the allocation of goods and time. Testing the pooling hypothesis is difficult because most family income sources are not exogenous to the allocations being analyzed. In this paper, we present an alternative test based on a "natural experiment"-a policy change in the United Kingdom that transferred a substantial child allowance to wives in the late 1970s. Using Family Expenditure Survey data, we find strong evidence that a shift toward greater expenditures on women's clothing and children's clothing relative to men's clothing coincided with this income redistribution.
The Journal of Human Resources © 1997 Board of Regents of the University of Wisconsin System