Tests of Income Pooling in Household Decisions

Using the Progresa data from Mexico, we investigate intrahousehold decision making using a variety of outcomes. We exploit both the experimental nature and the (short) panel dimension of the data to measure the impact of exogenous changes in the intrahousehold distribution of resources on household decisions. We test for global pooling of resources within households, which would correspond to the unitary model of household decision making. We also exploit a set of questions about power and the decision making process in the household to investigate aspects of strategic interactions between household members. Our findings confirm previous rejections of income pooling. We also cannot reject that the wife's relative income share is a significant determinant of the wife's decision making power in the household, with a higher share of income associated with more decision making power. Journal of Economic Literature Classification Numbers: J12, D13, H31.     

Spending Time and Money within the Household*

We consider, both theoretically and empirically, the allocation of time and money within the household. The research question is whether a married person who enjoys more leisure than their partner also receives more consumption (which seems to indicate the outcome of power within the household) or receives less consumption (which seems to indicate differing intrahousehold preferences). We develop a simple parametric structural model with household production that is tested on survey data. We find that relative wages have an impact on power. For leisure, this effect is dominated by a conventional wage effect, in which the partner who has the higher wage takes less leisure.     

Gender Roles and the Division of Unpaid Work in Spanish Households

Abstract

This paper examines the role of the doing-gender hypothesis versus traditional models of the household in explaining how the woman's share of home labor varies with relative earnings. The findings, using the 2002–3 Spanish Time Use Survey (STUS; Spanish Statistical Office 2003), support the doing-gender hypothesis in the case of housework: a woman's relative share of housework fails to decrease with her relative earnings beyond the point where her earnings are the same as her husband's. In contrast, a woman's share of childcare time displays a flat pattern over the distribution of her spouse's relative earnings. This last result is neither consistent with traditional theories of the household, nor with the doing-gender hypothesis. It can, however, still be interpreted in light of social norms, whereby women specialize in this type of caring activity regardless of their relative productivity or bargaining power.     

The Women's Movement Against Sexual Harassment,by Carrie N. Baker

This paper examines some of the effects of East and West German family policy on women's economic position by analyzing intrahousehold bargaining power, defined here as based on co-resident partners' relative fall-back positions, which in turn depend on the individuals' access to income in the event that the partnership ends. East German policy sought to integrate women into the labor force through programs such as free public child care and liberal maternity leave. West Germany based its family policy on the assumption of a stark gender division of labor, with one lifetime breadwinner per family and a second parent who temporarily leaves the labor force to raise children. On the basis of her findings and analysis, the author argues that while East German institutions increased women's bargaining power, gender-specific policies interfered with women's ability to use this power to bring about changes in the household division of labor. West German family policy did not assign gender roles, but it offered women less bargaining power with which to negotiate. The author maintains that society's refusal to address women's greater child-rearing costs is not based on an assessment of such costs and the costs of redistributive government programs, but on the assumption that women should absorb the risks and burdens of reproduction.     

Wives' time allocation and intrahousehold power: evidence from the Philippines

Utilizing a rich survey data collected in the Southern part of the Philippines, this paper examines the time allocation of wives within the collective household framework by investigating not only the role of socioeconomic factors but also the influence of various intrahousehold power indicators. Analysis of autonomy and finality of intrahousehold decisions discloses that decisions are not unilaterally decided by a single household member, a result which confirms the prediction of collective household framework. Adopting a simple test procedure, this paper also examines which of the competing household models, collective or unitary, best describes these Philippine time-use data. Testing results lend support to the validity of the collective household framework.     

Identifying non-cooperative behavior among spouses: Child outcomes in migrant-sending households

I propose a model of household decision-making under asymmetric information and show that resulting allocations may not be fully cooperative. The model yields a simple test for cooperative decision-making, which I apply to data from China. I find that, when the father migrates without his family, children spend more time in household production, while mothers spend less time in both household production and income-generating activities. This is not consistent with standard cooperative models of the household: simply reallocating time to compensate for the father's absence would cause an increase in household labor for both children and mothers and, if migration occurs in response to a negative shock, we should observe an increase in mothers' time in income-generating activities rather than a reduction. The results also do not appear to be driven by an increase in mothers' bargaining power, as children's human capital is not affected by migration, controlling for income.     

The incremental time costs of children: An analysis of children's impact on adult time use in Australia

Abstract

Raising children takes both time and money. Scholars have sought convincing ways to capture the costs of children, but even when these estimates include indirect costs, such as mothers' foregone earnings, they fall short of the true time costs involved. This paper uses data from the 1997 Australian Bureau of Statistics (ABS) Time Use Survey to study how the allocation of time differs across households with varying numbers and ages of children and how households with children differ from those without children. It also examines the intra household division of time resources, showing how childcare, related unpaid work, and the total market and non-market workloads compare for a couple in the same household. It includes secondary activity in an analysis of total parental time commitments to give a more accurate picture of the time cost of children than is possible on the basis of analyzing “primary” activities alone.     

Accounting for United States Household Income Inequality Trends: The Changing Importance of Household Structure and Male and Female Labor Earnings Inequality

Using a shift‐share analysis on March CPS data, this paper estimates the degree to which changes in labor earnings, employment, and marriage patterns account for household income inequality growth in the United States since 1979. The factors contributing to the rapid rise in income inequality in the 1980s differ substantially from those contributing to its slower increase since that time. Unlike findings for the 1980s when changes in the correlation of spouses' earnings accounted for income inequality growth, this factor is no longer a major contributor toward its continued increase. Additionally, the 2000s business cycle is the first full business cycle in at least 30 years where changes in earnings of male household heads accounted for declines in income inequality. Instead, the continued growth in income inequality in the 2000s was accounted for primarily by increases in female earnings inequality and declines in both male and female employment.     

Wealth Inequality and Intergenerational Links

Previous work has had difficulty generating household saving behaviour that makes the distribution of wealth much more concentrated than that of labour earnings, and that makes the richest households hold onto large amounts of wealth, even during very old age. I construct a quantitative, general equilibrium, overlapping-generations model in which parents and children are linked by accidental and voluntary bequests and by earnings ability. I show that voluntary bequests can explain the emergence of large estates, while accidental bequests alone cannot, and that adding earnings persistence within families increases wealth concentration even more. I also show that the introduction of a bequest motive generates lifetime savings profiles more consistent with the data.     

Intrahousehold moral hazard frictions and household poverty traps in rural India

We empirically study the role of assets held by women in the creation of household wealth using data from rural India. We design a streamlined model of intrahousehold project funding where moral hazard frictions between spouses and women's asset control are the main ingredients. As predicted by the model, the data show that household asset accumulation depends on women's asset control in a non-monotonic way. Results indicate no presence of multiple equilibrium poverty traps, but do show that exogenous negative shocks will trigger assets aggregation within households where both spouses are present. This resilience mechanism is, however, not found in female headed household as these households have a monotonic relationship between women's wealth control and asset creation. We thus argue that policies to support women's empowerment need to distinguish women based on their individual wealth levels and headship status to enhance household well-being in remote Indian communities.     

Family policy,intrahousehold bargaining,and child health

This study examines the effects of an exogenous change in family policy in Ethiopia on women empowerment and the allocation of resources toward child health. Empowerment is formalized as an unobserved latent variable based on a large set of questions pertaining to women's autonomy and decision-making power. Exploiting the time and regional variation in the implementation of the law, the study finds that early implementation of the reform increases women's access to information, literacy and education levels, and their assertiveness toward family planning and domestic violence. In addition, more decision power in the hands of women is found to have a positive impact on investments in the health and nutrition of children. The findings suggest that factors that do not enter the individual's preferences may affect outcomes for individuals and emphasize the role of intrahousehold heterogeneity. The results are robust to a battery of validity and specification checks.     

The impact of targeting policy on spouses’ demand for public goods,labor supplies and sharing rule

This paper studies the impact of targeted unconditional cash transfers on the spouses’ demand for public goods, labor supplies and sharing of resources. We estimate a collective labor supply model with distributional factors which is extended to include preferences over marketable public goods (including child goods). In this way, unlike previous research, we consider the impact of such transfers on the intrahousehold allocation of resources and distinguish between the labeling and recipient effects. We exploit the UK experience and find evidence in favor of the collective model with separable preferences over labor supplies and public goods. This finding implies a recipient effect and not a labeling effect of child benefits. Given the household’s unearned income, the bigger the wife’s bargaining power, the more the resources allocated to public goods (including child goods) and the wife’s private consumption. The results can be useful in the design of family policy which aims to improve the relative welfare of children within the family and alleviate any intrahousehold consumption inequalities.     

Household Decisions and Equilibrium Efficiency

A general equilibrium model is introduced where a household may consist of several members, each with individual preferences and/or resources. When households obey collective rationality, certain intrahousehold externalities can be fully internalized by the respective households so that competitive exchange among households is efficient. As a rule, however, such intrahousehold externalities are not fully internalized by individual household members acting in their personal interest so that competitive exchange among such individuals is only efficient in exceptional cases.     

Maternal Healthcare in Tajikistan: A Bargaining Framework

Abstract

This study examines women's declining use of maternal healthcare services in post-socialist Tajikistan. Using data from the 2003 and 2007 Tajikistan Living Standards Surveys (TLSS), the findings support previous evidence that a woman's use of prenatal and delivery care depends on her education, household income, and proximity to services. However, previous models have not specified who makes the decision to use maternal healthcare services. This study finds that in Tajikistan a woman shares decision making with her spouse and the eldest woman in the household. There is limited evidence that traditional proxies for bargaining power, such as relative earnings level, affect outcomes. The authors conclude that where women's exit options are limited, surveys evaluating the value of women's assets and their services in the home, as well as questions about decision making, will allow more refined measures of women's bargaining power.     

Do Education and Sex Matter for Intergenerational Earnings Mobility? Some Evidence from Australia

This paper analyses the intergenerational earnings mobility in Australia for all combinations of mothers, fathers, sons and daughters. We find that mobility is highest between parents and children of the opposite sex. Daughters are more mobile than sons with respect to fathers' earnings, but there is no statistical difference between the sexes' mobility with respect to mothers' earnings. We also consider how differing levels of mobility between the sexes may be related to the education level of the children. It was found that the father–son elasticity increases with son's education level and that the difference between son–father and daughter–father mobility may be associated with the higher levels of education obtained by females from less affluent backgrounds.     

Effect of marriage registration on fertility and intrahousehold distribution in Thailand

Research has shown that changes in the marriage and family laws generally affect the formation, welfare distribution, and dissolution of marriage. However, little is known about the effects of constituting state-sanctioned marriage as opposed to informal marriage, where these laws do not fully apply. The present paper studied the effects of formal marriage registration on fertility outcomes and intrahousehold distribution among married couples in Thailand. Using data from the 1993 Survey for the Status of Women and Fertility in Thailand (SWAFT), it was found that marriage registration increases the number of children in a family and enhances women's contribution to and control of household finances. These results suggest that formal marriage registration promotes spousal cooperation and increases the welfare of women, supporting recent policy efforts in many developing countries in the development and expansion of vital registration systems.     

To what extent do earnings affect the R&D decision of Chinese manufacturing firms?

ABSTRACT

As R&D activities are involved in inherent uncertainty of large investment, high risk and long return periods, earnings, as the main source of internal financing, have been a significant factor of R&D decision in the firms. In contrast to the previous research, this study investigates the impacts of firm’s earnings on R&D decision, in which earnings are measured by the indicators of earnings level, earnings quality and earnings persistence, while separating firm R&D activity into two stages of (i) the decision to undertake R&D activity and (ii) the amount to be invested on innovation activities. We document that earnings level can increase the probability of undertaking R&D activity, but has no effect on R&D investment intensity. Earnings quality and earnings persistence have a promotional effect on both stages of R&D decision. The empirical evidence of the subsamples shows that the impacts of earnings are heterogeneous across different ownership and technology-intensity firms.     

Does intrahousehold bargaining power enhance women's marital satisfaction? A perspective from two competing forces in China

In the context of two competing forces (i.e., socioeconomic transformation vs. traditional cultural norms) influencing Chinese family and its members, the paper uses the China Family Panel Studies (CFPS) to empirically examine the causal relation between intrahousehold bargaining power and women's marital satisfaction. By employing an instrumental variable approach, the paper finds that intrahousehold bargaining power negatively affects women's marital satisfaction. This conclusion remains valid after performing various robustness checks. However, there are some heterogeneous effects found that the negative effect is particularly significant among those women of higher age and constrained by external traditional norms. These women are more conservative in their own thoughts and thus tend to support the traditional gender belief of “men being the masters of the family.”     

The Gendered Nature of Poverty in the EU: Individualized versus Collective Poverty Measures

Due to the adoption of the household as a unit of analysis, researchers have failed to identify accurate measures of women's income poverty. This study proposes an individualized measure of European poverty to highlight gender differences in the economic crisis. Employing data from the European Union Statistics on Income and Living Conditions (EU-SILC) for the period 2007–12, it compares the household-based at-risk-of-poverty rate (ARPR) and the individualized financial dependency rate (FDR). The study shows that the gender gap in poverty in Europe is considerably higher when computed through FDR. Indeed, since the ARPR constitutes a proxy of the household's average conditions, it levels down gender inequalities within the household and also variations in individuals’ incomes over time. Only more detailed data collection on intrahousehold resource sharing will possibly allow the development of more precise and realistic indicators of women's and men's risks of poverty and financial dependency.     

Factor Components of Inequality: A Cross‐Country Study

This paper uses data from the Luxembourg Income Study to examine some of the forces that have driven changes in household income inequality over the last three decades of the twentieth century. We decompose inequality for six countries (Canada, Germany, Norway, Sweden, the U.K., and the U.S.) into the three sources of market income (earnings, property income, and income from self‐employment) and taxes and transfers. Our findings indicate that although changes in the distribution of earnings are an important force behind recent trends, they are not the only one. Greater earnings dispersion has in some cases been accompanied by a reduction in the share of earnings which dampened its impact on overall household income inequality. In some countries the contribution of self‐employment income to inequality has been on the rise, while in others, increases in inequality in capital income account for a substantial fraction of the observed distributional changes.