Modelling interdependences between spouses by estimating income satisfaction

This paper models interdependences between spouses. To that end, it estimates income satisfaction in a collective family model framework using a sample of seven EU countries. The IV Hausman-Taylor estimator has been selected in the majority of countries, and it appears that those of Southern Europe (Greece, Portugal and Spain) are the only countries where both husbands’ and wives’ income satisfaction are significantly and positively affected by their spouses’ wages and non-wage incomes, thus indicating a particular way of life characterized by mutual cooperation and income sharing between spouses. This paper was partially written while José Alberto Molina was Visiting Fellow at the Department of Economics of the University of Warwick (UK), to which he would like to express his thanks for the hospitality and facilities provided. Moreover, the authors would like to express their thanks for the financial support provided by the Spanish Ministry of Education and Science (SEJ2005-06522) and by the BBVA Foundation. The usual disclaimer applies. Citation: García, Inmaculada, Jose Alberto Molina, and María Navarro, (2007) "Modelling interdependences between spouses by estimating income satisfaction." Economics Bulletin, Vol. 4, No. 10 pp. 1-5 Submitted: March 2, 2007. Accepted: April 2, 2007. URL: http://economicsbulletin.vanderbilt.edu/2007/volume4/EB-07D10004A.pdf