Women's employment, intra-household bargaining, and distribution: a two-sector analysis

This paper investigates the intra-household impact of an expansionin employment opportunities for women in a dual labor market,when the informal sector functions as a gateway to the formalsector. We us a variant of the Harris-Todaro framework withtwo-period overlapping generations to model this economy. Laborallocation decisions and distribution of household consumptionare determined according to the generalized Nash cooperativebargaining solution, and agents have perfect foresight. It isshown that an increase in demand for women's labor can shiftintra-household distribution in favor of men and thereby reducewomen's welfare.