“Poor and wealthy hand-to-mouth households in Belgium”
Published, Review of Economics of the Household,
November 2023
with
Laurens Cherchye
,
Thomas Demuynck
,
Bram De Rock
, Geoffrey Minne, Maite De Sola Perea and
Frederic Vermeulen
We identify the population shares of poor hand-to-mouth households, wealthy hand-to-mouth households and non hand-to-mouth households in Belgium. We apply the methodology proposed by Kaplan & Violante (2014) and Kaplan et al., (2014) to the Belgian component of the Household Finance and Consumption Survey. We find that the fraction of hand-to-mouth households in Belgium is substantial and predominantly consists of wealthy hand-to-mouth households. We also compare the observable characteristics and marginal propensities to consume (MPCs) of the three household types. Belgian wealthy hand-to-mouth households have characteristics that resemble those of the non hand-to-mouth households, while their MPCs are often more similar to those of the poor hand-to-mouth households. This pleads for giving a unique place to each type of household when evaluating the effects of fiscal policy
“Housing Wealth, Marital Stability and Labor Supply: an Intertemporal Analysis” (submitted)
with
Bram De Rock
and
Tom Potoms
“Personality traits, the marriage market, and household
behavior”
with
Gastón P. Fernández
“Fertility and Parental Careers: How Beliefs Shape Intra-household Choices” (draft soon)
Standard collective models of household behavior assume that spouses hold accurate beliefs about the stability of their marriage and, by implication, about the insurance their union provides. We test this assumption with new survey data and show that divorce risk is systematically mispriced. Embedding these distorted beliefs in a calibrated limited-commitment model shows that optimism acts like underpriced insurance: women who understate divorce risk advance childbearing, interrupt early-career work, and lose lifetime earnings, while men are largely unaffected. We then evaluate a self-financed divorce-contingent insurance scheme, which corrects belief-driven mispricing: couples delay first births by about one year without reducing completed fertility, divorce rates remain stable, post-divorce consumption gaps halve, and early-career market hours rise.
“Raising children: Marriage, preferences over childcare, and gender inequality”
(Data collection soon to begin)