Labor Market Participation, Marriage and Individual Welfare

We empirically analyze the impact of labor market participation on individual welfare, focusing on material consumption distribution within households. We model household allocations of consumption and time, considering individual preferences and intrahousehold decision processes. Utilizing a revealed preference, nonparametric structural methodology, we assess individual welfare in multi-person households, accounting for consumption inequality and economies of scale. Using US Panel Study of Income Dynamics (PSID) data, we identify the effects of a measure of unemployment and education on welfare, revealing significant heterogeneity influenced by spousal education and employment status, with employment effects predominating.