Except in special cases, market work and household membership are jointly chosen. A Nash bargaining model of family behavior is used to specify stochastic structural relationships (two indirect utility functions and a market and a reservation wage function) that jointly determine work, consumption, and household membership. The maximum likelihood estimates of the implied trinomial probit model differ sharply from those obtained when either market work or household membership is taken as exogenous. This application to white male youths from the National Longitudinal Surveys shows the insurance function of families: parents insure their sons against poor market opportunities.

Since 1964 all the increase in female labor force participation in Australia can be attributed to married women. About 90% of the increase can be attributed to women employed part time. The paper argues that aggregate female participation rate equations cannot be regarded as labor supply curves. The female wage rate relative to that of males is exogenously determined by wage-fixing authorities above market-clearing rates, and the excess supply of labor is not adequately measured by the unemployment rate. Married women and part-time workers have a high propensity to bypass the unemployment pool when leaving or seeking a job. Participation equations are dominated by employment demand for sex-segregated jobs.