The Identification of Unobservable Independent and Spousal Leisure

This paper is based on the idea that for each partner in a marriage, there are two distinct types of leisure. One type is each person’s independent (or private) leisure, and the other type is spousal leisure, whose importance has long been emphasized in the literature of psychology. While each type of leisure is unobservable (only total leisure is observed), it is shown that the recent collective models of the intrahousehold allocation initiated by Chiappori can be extended to identify each type of leisure up to an additive constant. In particular, the effects of each member’s wage, household unearned income, and extrahousehold environmental parameters on the independent and spousal leisure and on the sharing rule are fully identified. The observational requirement here is the same as in other studies, namely, the observation of individual labor supply, individual wages, household unearned income, one assignable good, and consumption expenditure at the household level.