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The evidence that the same income can lead to different household decisions, depending on who the earner is, has led to an effort to replace the standard household model with the 'collective model', which recognises that a household's decisions depend on the power balance between the husband and the wife. This article recognises that the power balance can, in turn, depend on the decisions made. A new 'household equilibrium' and its dynamics are described and it is shown that there can be multiple equilibria in female labour-supply, and that child labour can decline and rise as the wife's power increases. Copyright 2006 Royal Economic Society.
Kaushik Basu (Fri,) studied this question.