Intrahousehold property ownership, women’s bargaining power, and family structure

Abstract

This study investigates the effect of intrahousehold property ownership on family structure using a difference-in-differences (DID) strategy and an exogenous source of variation in housing property ownership in China. Specifically, a 2011 revision of the marriage law changed the property division rule upon divorce from an equal division to a title-based division under certain circumstances, leading to a loss in intrahousehold property ownership for some women. The main results show that the loss of housing property ownership deteriorates wives’ outside option, lowers the probability of divorce and increases the likelihood that they will remain in a low quality marriage. Further effects include an inducement for the husband’s parents to move in, who bring more traditional gender norms to the core family, become involved in household decision-making and thus influence the young couple’s behaviors. Consequently, women are less likely to work in the labor market and shoulder a greater share of chores between themselves and their husbands. Heterogeneity analyses show that higher property values are associated with larger treatment effects. This study provides evidence of a chain of events in intrahousehold bargaining in which an external shock to one spouse’s outside option changes the intrahousehold bargaining power and consequently changes household decisions including family structure. Moreover, it highlights the importance of considering the family structure when interpreting other aspects of bargaining outcomes.