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WP3 – Life-Cycle Model


Further develop and substantially extend the micro model that describes the joint determination of labour supply,
caregiving and (dis)saving of parents and children as part of their life-cycle choices.


Task 3.1: Designated Child Model (UC3M, M1-M18): Extend the Barczyk & Kredler (2018, “B&K”) model to include
multiple (step-)siblings who designate a (step-)child in advance as caregiver (“designated child model”). Leave location
choice exogenous. This task includes the “translation” of the continuous-time solution mechanisms developed by
Barczyk et al. (2021) to the benchmark model’s discrete time formulation along the lines of Bakota and Kredler (2022).
Task 3.2: Cooperative Siblings Model (MEA, M1-M18): Extend B&K model to include multiple caregivers who act as
collective decision makers (“cooperative siblings model”). Leave location choice exogenous.
Task 3.3: Location choice (McGill, M19-M36): Extend both models to make location endogenous. Since location
determines productivity, this will link caregiving and female labor force participation with productivity-driven economic
Task 3.4: Adaptation of models to econometric needs (UC3M, M18-M42): While the model development is finished
with the previous task, this task will adapt the selected model in the course of the econometric estimation when we incur
difficulties in identifying parameters or if the solution speed needs improvement. Furthermore, we will investigate which
of the two models fits the data better (by country or population strata).
Task 3.5: Overconfidence and procrastination (MEA, M36-M45): Extend models to accommodate biased expectations
due to overconfidence (e.g., falsely assuming low divorce probabilities) and procrastinating behaviour (following
Börsch-Supan et al. 2018).
Role of participants: While this WP will be led by UC3M, it is very closely and equally shared joint work of UC3M,
McGill and MEA.

  • D3.1: Designated child model
  • D3.2: Cooperative siblings model
  • D3.3: Location choice
  • D3.4: Model fit
  • D3.5: Biased expectations