Income sources, intrahousehold allocation and individual poverty

Abstract

Policies aimed at redistributing to the most vulnerable individuals must consider inequality within households as much as between households. In that spirit, many cash transfers are targeted at women rather than men. Tax legislations can also contain specific gender provisions that treat men and women differently. Whether these policies operate some intrahousehold redistribution, or are defeated by the household agency problem, is an open question. This paper provides new insights by adapting models of intrahousehold allocation to account for women's and men's net‐of‐tax earnings and targeted benefits as determinants of the household resource sharing function. We suggest applications using household expenditure data for Argentina and South Africa. Net‐of‐tax earnings and benefits commanded by women are often positively related to their and their children's resources. We provide counterfactual simulations to illustrate how women's financial power – and its sources – may modify their consumption share and thus their individual poverty status.