Taking gender differences in bargaining power seriously

Most studies that explore collective models of intra-household decision-making use economic outcomes such as human capital, earnings, assets, and relative income shares as proxies of the relative distribution of bargaining power. These studies, however, fail to incorporate important measures of control over and management of the economic resources within households. In the current study, a direct measure of financial decision-making power within the household is used to directly assess the distribution of bargaining power. Coarsened exact matching, an identification strategy not yet applied in studies of this nature, is applied to couple-level observational data from South Africa’s longitudinal National Income Dynamics Study. The influence of gender differences in intra-household decision-making on resource allocations to per capita household expenditure is assessed. In the case of greater financial decision-making power in couples being assigned to wives rather than husbands, per capita household expenditure on education increases significantly. The empowerment of women with financial decision-making power therefore holds the promise of realizing the benefits of investments in human capital.

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DESIRE AND DEVELOPMENT

Macroeconomic Dynamics ◽

10.1017/s1365100517000943 ◽

2018 ◽

Vol 23 (07) ◽

pp. 2717-2747 ◽

Cited By ~ 1

Author(s):

Holger Strulik

Keyword(s):

Gender Differences ◽

Demographic Transition ◽

Bargaining Power ◽

Gender Wage Gap ◽

Wage Gap ◽

Female Empowerment ◽

Modern Contraceptives ◽

Distribution Of Power ◽

The Impact

This paper explores the impact of gender differences in the desire for sex and the distribution of power in the household on the onset of the demographic transition and the take-off to growth. Depending on the price and efficacy of modern contraceptives, the gender wage gap, and female bargaining power, the economy assumes one of two possible equilibria. At the traditional equilibrium, contraceptives are not used, fertility is high and education and growth are low. At the modern equilibrium, contraceptives are used, fertility is low and further declining with increasing income, and education and growth are high. The theory motivates a “wanted fertility reversal”: At the traditional equilibrium, men prefer more children than women, whereas at the modern equilibrium, men prefer fewer children than women. Female empowerment causes households to provide more education for their children and leads to an earlier uptake of modern contraceptives and an earlier onset of the demographic transition and the take-off to modern growth.

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