Power to the teens? A model of parents' and teens' collective labor supply

TL;DR

This paper develops a collective household model to analyze how parents and teens jointly decide on time and income allocation, revealing gender differences in bargaining and implications for policy effectiveness.

Contribution

It introduces a novel collective household model that captures joint decision-making and gender-specific bargaining between parents and teens.

Findings

Sons bargain cooperatively with parents, daughters do not.

Gender gap in household responses is due to bargaining differences.

Policy targeting teens must consider gender disparities.

Abstract

Teens make life-changing decisions while constrained by the needs and resources of the households they grow up in. Household behavior models frequently delegate decision-making to the teen or their parents, ignoring joint decision-making in the household. I show that teens and parents allocate time and income jointly by using data from the Costa Rican Encuesta Nacional de Hogares from 2011 to 2019 and a conditional cash transfer program. First, I present gender differences in household responses to the transfer using a marginal treatment effect framework. Second, I explain how the gender gap from the results is due to the bargaining process between parents and teens. I propose a collective household model and show that sons bargain cooperatively with their parents while daughters do not. This result implies that sons have a higher opportunity cost of attending school than daughters. Public policy targeting teens must account for this gender disparity to be effective.