The family as the health producer--when spouses are Nash-bargainers.

The Grossman model is extended to a situation in which the family is regarded as the producer of individual health and spouses are Nash-bargainers. The model has implications for the interaction between family structure, income and the stocks of health capital and the bargaining strength of different family members. The main insight is that the possibility of divorce affects the distribution of health capital between family members. We analyse, inter alia, the impact on the distribution of health (particularly regarding child health) of changes in family policies related to the dissolution of the family.