Gender and Intra-household Bargaining

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Stockholm Doctoral Course Program in Economics

Development Economics II: Lecture 8

Gender and

Intra-household

Bargaining

Masayuki Kudamatsu IIES, Stockholm University

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Big questions in this lecture

1. Why do women lag behind men in

LDCs?

• Mortality (“missing women”)

cf. Anderson and Ray (2010) in class

• Educational attainment

• 79 girls for every 100 men in secondary/tertiary schools

• Labor market opportunities

• Political representation

• 15.9% of MPs: women

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1. Causes of gender inequality in

LDCs

Following Duflo (2005), we ask 3 questions:

• Does poverty reduction reduce

gender gap?

• Does empowerment of women

cause development?

• How can empowerment of women

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1-1 Poverty causes gender gap?

• Poor HH may allocate less

resources to girls than to boys

• This is very hard to verify, however.

• Cannot observe what each individual

in a HH eats

• If observed, parents may change

behavior

• Girls may need less than boys

• Deaton (1989) proposes a way to

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1-1a Deaton (1989)

Estimate the cost of an additional kid in terms of adult goods by

πij =

• x: total expenditures

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1-1a Deaton (1989) (cont.)

• Does π_ij differ between boys and

girls of same age group?

• No in Cote I’voire (Deaton 1989) or

in Pakistan (Deaton 1997)

⇒ In everyday life, no discrimination

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1-1b Evidence in times of crisis

• Rose (1999): mortality during

droughts higher for girls in India

• Except for those HHs w/ assets to sell

⇒ Insurance against risk / escape from poverty will help

• Miguel (2004): Old women

murdered (“witch killing”) after crop failure in Tanzania

• Bjorkman (2008): Girls drop out of

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1-1c Lack of employment

opportunities

• Munshi and Rosenzweig (2006):

• Rise of software industry in India in

the ’90s

⇒ Return to education in English↑

⇒ Enrollment for low-caste girls↑ (more than low-caste boys)

• Boys: need to maintain the caste

network for job search

• Girls: no such institutional constraints

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1-1c Lack of employment

opportunities (cont.)

Why matters?

(1) Return to education for girls ↑

• Jensen (2010)

(2) Wife’s bargaining power ↑

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1-1d Summary

Poverty reduction helps narrowing gender gap by

• making HHs less vulnerable to

income shocks

• offering employment opportunities

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1-2 Does female empowerment

cause development?

• Poverty reduction, however, seems

not enough

• Missing women in South Korea &

Taiwan today

• Female empowerment may be

needed, but it’s costly (men suffer)

• If it brings about development, such

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1-2a Mother’s education

• Literature finds its robust correlation

w/ child health

• Strauss and Thomas (1995) for a

survey

• Breierova and Duflo (2004) exploit

Indonesia’s school expansion as exogenous change in education

⇒ Result: Father’s education equally

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1-2b Income in the hands of

women

• Literature repeatedly finds its

correlation with child health

cf. Microfinance / CCT often target women

• Duflo (2003) & Edmond (2006): use

a rapid increase in 1990-93 of the pension benefits for black men

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1-2b Income in the hands of

women (cont.)

• Duflo (2003): Girls with

grandmother: taller than those without; no effect of living with grandfather or on boys

• Edmonds (2006): Boys with

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1-2c Political representation

• Chattopadhyay & Duflo (2004)

• Forrandomly chosen rural villages in India since 1992, only women can become village chief (Pradhan)

• EstimateYij = αi +βRj +γDijRj +εij

• Yij: policyi in municipalityj

• Rj: reservation dummy

• Dij: extent to which women care policyi

more than men in municipalityj (e.g. drinking water)

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1-2c Political representation

(cont.)

• But D_ij is not necessarily large for

pro-development policies

• For education / road, Dij is small (⇐

Men travel more)

• Clots-Figueras (2010)

• Exploit close-elections for state legislature in India where woman barely wins against man

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1-2d Summary

• Female empowerment may or may

not promote development

• In each dimension, evidence is mixed

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1-3 How to achieve female

empowerment

• Perception bias against women

may not go away with development

e.g. “Stereotype threat” (Spencer et al. 1999)

• Literature finds two effective

interventions (both from India):

(1) Cable TV (Jensen and Oster 2009)

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2. How to model HH

decision-making

• We saw gender gap appears to be

related to wife’s bargaining power w/i HH via better employment opportunities

• We also saw income in the hands of

women sometimes matters

• How do we think about these

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2-1 Unitary HH model

• Although a HH consists of multiple

individuals, it’s often assumed that a HH maximizes a unique utility function

• One implication of such HH models:

income earned by different members will be pooled

⇒ Who earns income should not affect

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• As we saw some examples above,

who earns income does matter empirically

⇒ Appropriate to model HH

decision-making as bargaining by HH members

• But it’s hard to observe

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2-2 Collective HH model

• Chiappori (1992) proposes

imposing only one restriction on the intra-HH bargaining process:

Pareto optimality

• This can be modelled by assuming

that HH solves the following problem:

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maxxuA(x) +λuB(x) s.t. p�x ≤ Y

• λ: B’s relative bargaining power

• Relative income, local sex ratio (how

easy to get re-married), etc.

⇒ Who earns income does affect

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2-3 Application of collective HH

model

• Anderson and Baland (2002) use

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2-4 Testing Pareto efficiency

• But is intra-HH resource allocation

really Pareto-efficient?

• Udry (1996): No in Burkina Faso

• Plots owned by women yield less (and use less inputs such as fertilizer) than those owned by men, conditional on plot characteristics and

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2-4 Testing Pareto efficiency

(cont.)

• Follow-up to Udry (1996):

• Rangel and Thomas (2005) show counter-evidence in Senegal & Ghana

• Akresh (2008): less inefficient if

negative rainfall shocks

• Goldstein and Udry (2008): because

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2-4 Testing Pareto efficiency

(cont.)

• Is intra-HH resource allocation

really Pareto-efficient?

• Bobonis (2009): Yes in Mexico

• By combining Bourguignon et al. (2009)’s method with exogenous

variation in factors affecting λ (familiar to development economists):

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2-4 Testing Pareto efficiency

(cont.)

Bourguignon et al. (2009):

• Denote HH demand function for

good i by Ci = ξi(x,p,a,z)

• x: total HH income / expenditure • p: price vector

• a: preference factors (age etc. )

• z: distribution factors (those affecting

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Bourguignon et al. (2009) (cont.):

• Assume: ∃i,k, ξ_i(x,p,a,z) is strictly

monotone in zk

• Denote one of such z_k’s by z₁

⇒ z1 = ζ(x,p,a,z−1,Ci)

• Plug this into ξ_j(·) for j �= i ⇒ Cj = θ_ji(x,p,a,z−1,Ci)

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Bourguignon et al. (2009) (cont.):

• A necessary & sufficient condition

for Pareto efficient allocation is

∂θ_ji(x,p,a,z−1,Ci)

∂zk

= 0,∀j �= i,∀k �= 1

• In other words,Ci summarizes all the

information from z

⇐ zaffects the location on the Pareto

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Bobonis (2009):

• Check this condition with Mexican

HH data by estimating, for good j,

Cj = αjCi + βjz2 + γjx +a�δj + εj_j

• C_i: child clothing consumption • z2: rainfall (income earned jointly)

• x: HH total expenditure

• Ci & x: instrumented by z1 (Progresa

treatment indicator: income earned by mother) & HH income

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Bobonis (2009) (cont.): Findings

• Child clothing goes up with

Progresa treatment (Table 4 Row 3)

⇒ Assumption (ξ(·): strictly monotonic

in z1) satisfied

• System OLS (εj: allowed to be

correlated across j’s)

⇒ Fail to reject the null that βj = 0,∀j

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Gender and Intra-household Bargaining

Gender and

Intra-household

Bargaining

Big questions in this lecture

1. Causes of gender inequality in

LDCs

1-1 Poverty causes gender gap?

1-1a Deaton (1989)

1-1a Deaton (1989) (cont.)

1-1b Evidence in times of crisis

1-1c Lack of employment

opportunities

1-1c Lack of employment

opportunities (cont.)

1-1d Summary

1-2 Does female empowerment

cause development?

1-2a Mother’s education

1-2b Income in the hands of

women

1-2b Income in the hands of

women (cont.)

1-2c Political representation

1-2c Political representation

(cont.)

1-2d Summary

1-3 How to achieve female

empowerment

2. How to model HH

decision-making

2-1 Unitary HH model

2-2 Collective HH model

2-3 Application of collective HH

model

2-4 Testing Pareto efficiency

2-4 Testing Pareto efficiency

(cont.)

2-4 Testing Pareto efficiency

(cont.)

2-4 Testing Pareto efficiency

(cont.)

Other topics on gender/marriage