Job Insecurity Within the Household Are Australian Householders Caring When it Comes to Risk Sharing?

Abstract

We investigate perceived job security risk and the distribution of non-labour income between spouses in a household context. In the process, the restrictions implied by Beckerian-caring preferences in the Chiappori (2002) Collective model are considered, and estimates  of the sharing rule are derived. The findings support the idea of household formation as a tool that caring partners use to share risk. Our  results provide further insight as to how unemployment risk may affect interaction between Australian spouses.