Testing Unitary Models of Labor Supply on Decision-making Systems: Evidence from Japan

The household decision-making system (the distribution of each family member's decision- making power within a household) can be interpreted as a proxy variable for each family member's welfare weight and bargaining power. This study tests unitary models us- ing information on this system. The estimation results reveal that in households where the wife is the principal decision-maker, husbands work 15% more and wives work 59% less than those in households that adopt a different household decision-making system. Further, an individual's poor health condition reduces his or her decision-making power within the household. These results imply that the unitary models are rejected.