UNIVERSITÄT HOHENHEIM

INSTITUT FÜR HAUSHALTS- UND KONSUMÖKONOMIK

Lehrstuhl Haushalts- und Konsumökonomik sowie Genderökonomik

Alfonso Sousa-Poza

Household Economics III

WS 07/08

Course Syllabus

Goals This course builds-up on Consumer and Household Economics I and II by taking a more in-depth look at the topics discussed in previous semesters. The course is composed of two parts: the first part of the course will take an in-depth look at household dynamics with special emphasis being placed on the consumption and savings decision, intergenerational financial transfers, skill acquisition, fertility issues, and the allocation of time over the lifecycle. This part of the course will be based on William A. Lord’s “Household Dynamics: Economic Growth and Policy”; Oxford University Press (2002). The second part of the course will focus on original journal contributions, both theoretical and empirical, that deal with the allocation of resources and time, resource allocation within households, and marriage, divorce and fertility. The aim of this second part is to enhance students’ ability to understand original journal articles and position them in the appropriate theoretical framework. Stated somewhat differently: to move beyond well-prepared textbooks and into the realm of (often) condensed, complex, and specific research.

Course Requirements The course will follow a lecture format. Students are expected to participate in the lectures by asking questions or providing additional insights into the literature. While you will not be formally graded on your classroom participation, I cannot overemphasize the importance of asking questions and probing new idea as an essential mode of learning. I expect students to read these papers. Students must have successfully completed the Household and Consumer Economics I and II courses.

Requirements to Obtain a Grade for this Course Students taking the course for a grade will complete a written final examination at the end of the semester. Furthermore, students are expected to make a presentation and write a short summary on one of the topics in the second part of the course, i.e. read one or more journal articles and present the insights in class. The presentation and short summary will account for 30% of the final grade (the exam comprising 70%). Language Most lectures will be held in English. It is strongly recommended that presentations be made in English (and students presenting in English will receive a “bonus”). Nevertheless, some lectures and some presentations may take place in German.

Schedule and Venue Lectures will take place on Wednesdays between 10:15 and 11:45am in HS 6. The guest lecture by Patrick Puhani will take place on the 24 th of October 2007 at 16:15, and the guest lecture by Yu Zhu on the 15 th of February 2008 at 14:15 (venue to be announced).

Course Outline

Lecture Topic Literature

PART I 17/10 Introduction (1 hour lecture) 24/10, Guest lecture Patrick Puhani: "Der Effekt der 16:15 Verlängerung des Erziehungsurlaubs auf die Fortbildungsaktivitäten junger Frauen in Deutschland" 31/10 Consumption and saving Lord, 1.1 – 1.3, 2.3 07/11 No lecture 14/11 Intergenerational financial transfers Lord, 5.1 – 5.3 21/11 Family investments in children Lord, 6.1 – 6.2 28/11 Skill acquisition, inequality, and growth Lord, 7.1 – 7.4 05/12 The allocation of time between home and market Lord, 8.1 – 8.3 over the life cycle 12/12 Household fertility and economic growth Lord, 9.1 – 9.3

PART II 19/12 The theory of allocation of time and goods Becker (1965), Gronau (1977) 09/01 Static models of fertility and fertility regulation Goldin/Katz (2002), Hotz/Klerman/Willis (1996) 16/01 Costs and benefits of children Browning (1992), Deaton/Muellbauer (1986) 23/01 Collective models of the household I Manser/Brown (1980), McElroy/Horney (1981), Chiappori (1988) 30/01 Collective models of the household II Behrman (1988), Hotchkiss (2005), Knowles (2007) 06/02 Altruism and the family Altonji/Hayashi/Kotlikoff (1992, 1997) 15/02, Guest lecture by Yu Zhu, “child support, To be announced 14:15 separation and outcomes for children” Reading list for part II • Altonji, J. / Hayashi, F. / Kotlikoff, L. (1992): Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data, in: American Economic Review, 82(5), 1177-1198. • Altonji, J. / Hayashi, F. / Kotlikoff, L. (1997): Parental Altruism and Inter Vivos Transfers: Theory and Evidence, in: Journal of Political Economy, 105(6), 1121-1166. • Becker, G. (1965): A Theory of the Allocation of Time, in: Economic Journal , 75(299), 493- 517. • Behrman, J. (1988): Intrahousehold Allocation of Nutrients in Rural India: Are boys favored? Do Parents Exhibit Inequality Aversion?, in: Oxford Economic Papers, 40(1), 32-54. • Browning, M. (1992): Children and Household Economic Behavior, in: Journal of Economic Literature , 30(3), 1434-1475. • Chiappori, P.-A. (1988): Nash-bargained Household Decisions: A Comment, in: International Economic Review, 29(4), 791-796. • Deaton A. and J. Muellbauer (1986): On Measuring Child Costs: With Applications to Poor Economics, in: Journal of Political Economy , 94(4), 720-744. • Goldin, C. / Katz, L. (2002): The Power of the Pill: Oral Contraceptives and Women’s Career and Marriage Decisions, in: Journal of Political Economy , 110(4), 730-770. • Gronau, R. (1977): Leisure, Home Production, and Work: The Theory of Allocation of Time Revisited, in: Journal of Political Economy 85, 1099-1123. • Hotchkiss, J. (2005): Do Husbands and Wives Oool their Resources: Further Evidence, in: Journal of Human Resources , 40(2), 519-31. • Hotz, V. J. / Klerman, J. / Willis, R. (1996): The Economics of Fertility in Developed Countries: A Survey, in: M.R. Rosenzweig / O. Stark (eds.): Handbook of Population and Family Economics , North Holland. • Knowles, J. (2007): Why Are Married Men Working So Much? The Macroeconomics of Bargaining Between Spouses, IZA Discussion Paper No. 2909. • Manser, M. / Brown, M. (1980): Marriage and Household Decision-Making: A Bargaining Analysis, in: International Economic Review, 21(1). • McElroy, M. / Horney, M.-J. (1981): Nash-bargained Household Decisions: Toward a Generalization of the Theory of Demand, in: International Economic Review, 22(2), 333-347.