The economic model that underlies most of labour economics and public economics, particularly the analysis of taxation, is that of a single consumer/worker dividing their time between market labour supply and leisure. However, many issues in reality are concerned with policies towards families, a majority of which contain two earners. At the same time, quite a large literature has developed over the past three or four decades concerned with developing and testing models of family decision-taking. The purpose of this book therefore is to bring together the economics of multi-person households and those areas of labour supply and public economics for which this generalisation of the standard model seems to us to be most relevant and important. Essentially, it is proposing a new foundation for much of the analysis of labour supply and public economics.
After a general introductory chapter, the first part of the book, chapters 2–5, surveys the main developments in the economics of the household, focusing particularly on the use of the models to analyse labour supply, with emphasis also on models of time allocation, consumption and saving over the life cycle. We present models that can be used in their own work by graduate students and researchers in the areas of the economics of the household, labour supply and public policy.