Intrahousehold Resource Allocation Research Articles

Commitment in the Household: Evidence from the Effect of Inheritances on the Labor Supply of Older Married Couples

We study the effect of receiving an inheritance on the labor force participation (LFP) of both the recipient and the recipient's spouse in a population of older married couples. An inheritance is not subject to laws governing division of marital property at divorce, because it is not acquired with income earned during marriage. Hence it plays the role of a distribution factor in the intrahousehold allocation of resources, increasing bargaining power of the recipient. Controlling for inheritance expectations, we interpret the receipt of an inheritance as a shock to wealth. Our results indicate that receiving an inheritance reduces LFP of the recipient by four percentage points, comparable in magnitude to the effect of a decline in health. However, an inheritance has little or no effect on LFP of the spouse. These estimates are inconsistent with a dynamic, collective model of the household in which spouses have the ability to commit to an ex ante efficient allocation. The results are consistent with a model of limited commitment in which a shock to household resources can alter bargaining power. We discuss the implications for reform of Social Security spouse and survivor benefits.

Spouses in the Household and the Family Business – Who (does) the Care and Who (does) the Work

Abstract In this pilot study we explore the mutual conditionality of bargaining power between spouses in the processes of intra-household allocation of resources (care work) and the assignment of their roles in family businesses (paid work) in Vojvodina, Serbia. Our intention is to explain the changes in gender relations in family businesses run by spouses under different socio-economic and institutional conditions, and especially in the context of enforced postsocialist neoliberal transformation after 2009. We formulate a theoretical and methodological framework based on the case of ten firms and check its validity for deeper and wider research into the key causes, forms and characteristics of gender bias in this area.

Remittances and Household Expenditures on Education in Ghana's Northern Region: Why Gender Matters

ABSTRACTStudies of the impact of migrant remittances on receiving households assume that these households act as a unit in receiving remittances and making decisions about their use. Thus, many of these studies use the gender of the household head as a key control variable. This study questions this assumption, using original qualitative and quantitative data on rural–urban migration of women in Ghana to show that gendered social norms of household provisioning influence the intrahousehold flow of remittances. Regression results indicate that migrant women are more likely to send remittances to other women, creating female-centered networks of remittance flows even within male-headed households. The implications of this for intrahousehold resource allocation are explored through an analysis of the impact of the gender of the remitter and recipient on education expenditure. The results show that regardless of the gender of the household head, households in which women are the primary recipient of remittances spend more than twice as much on education as households in which men are the primary recipient.

Early Health Shocks, Intra-household Resource Allocation and Child Outcomes.

An open question in the literature is whether families compensate or reinforce the impact of child health shocks. Discussions usually focus on one dimension of child investment. This paper examines multiple dimensions using household survey data on Chinese child twins whose average age is 11. We find that, compared with a twin sibling who did not suffer from negative early health shocks at ages 0-3, the other twin sibling who did suffer negative health shocks received RMB 305 more in terms of health investments, but received RMB 182 less in terms of educational investments in the 12 months prior to the survey. In terms of financial transfers over all dimensions of investment, the family acts as a net equalizer in response to early health shocks for children. We estimate a human capital production function and establish that, for this sample, early health shocks negatively affect child human capital, including health, education, and socioemotional skills. Compensating investments in health as measured by BMI reduce the adverse effects of health shocks by 50%, but exacerbate the adverse impact of shocks on educational attainment by 30%.

Looking within the household: a study on gender, food security, and resilience in cocoa-growing communities

Many West African cocoa households experience a ‘lean season’ before the cocoa harvest, leaving them vulnerable to various events and issues which potentially cause stress – most notably food insecurity. This study, relying primarily on qualitative data from Côte d'Ivoire, examines how income allocation and intra-household dynamics affect household resilience during the lean season. Its findings indicate that in contexts in which women and men's income are separate and destined for different purposes in the household, the fact that men's income is often earmarked for individual spending creates particular problems for households in the lean season. Women's empowerment within the household is essential to improving intra-household resource allocation for resilience. In many contexts, this translates into development programmes supporting women to increase their production and ability to control income independently of men. However, a context of individual gendered agricultural production, and gendered spending obligations, such as West Africa, calls for a slightly different approach. Enhancing agricultural productivity is critical, but in addition it is important to encourage co-operation between women and men in households to result in joint decision-making in the interests of the household.

New Evidence on Intra-Household Allocation of Resources in Japanese Households

This paper examines intra-household allocation of resources to gain insight into family relationships and gender bias in Japanese households. We take the Engel curve approach to examine how adult consumption is affected by the presence of a child, either a boy or a girl, in the family. Empowered by diary-based high quality spending data from the Family Income and Expenditure Survey, our empirical results show that adult consumption is significantly reduced in households with children; furthermore, gender bias is not observed in total adult expenditures, while responses of adult clothing expenses to the presence of a child are significantly different between a boy and a girl: spending on a father's clothing is reduced when the child is a school-aged daughter, while spending on a mother's clothing decreases when a school-aged son is in the home. Our analysis also shows that after the early 2000s girls receive a larger share of spending for children's clothing as well as for high school education than boys.

Intra-household allocation of family resources and birth order: evidence from France using siblings data

We examine the effect of birth order on education, occupation, and parental transfers using four cross sections of the French Wealth surveys conducted between 1992 and 2010. Estimates from ordered models confirm the presence of a first born advantage in education and occupation, the latter persisting to a lesser extent after controlling for education. Strikingly, parents are on average more likely to make transfers to first-born children, although the vast majority provides cash or property gifts to all of their children. This first-born advantage in transfers is uncorrelated with the likelihood of having attained a higher education or better occupation. Overall, our findings suggest that in France, the mechanism supporting the first born advantage may not stem from confluence effects or family resource dilution.

Sibling sex composition, intrahousehold resource allocation, and educational attainment in China

Studies have found that the decline of the fertility rate, which reduces the number of siblings, is an important factor in narrowing the gender gap in education. However, given the number of children, sex composition of siblings also affects individual educational attainment. Few relevant studies on this issue are available in China. This study investigates the effects of sibling sex composition on intrahousehold resource allocation and individual educational attainment in the patriarchal cultural context of China. Under the influence of Chinese traditional culture and economic rationality, parents’ preference for sons leads to biased allocation of resources within the family, and the cost difference between raising boys and girls reinforces such a biased distribution. Analysis based on a nationally representative dataset confirms the hypothesis of this study. It finds that having brother(s) is detrimental to educational attainment and that the higher the proportion of girls in sibship, the more schooling one attains. This sibling sex composition effect is gender asymmetric and also heterogenous across birth cohorts.

Child schooling in India: the role of gender

Purpose – This paper aims to analyse factors that influence child schooling outcomes in India, specifically the role of gender. Design/methodology/approach – This paper uses data from the nationally representative Indian National Family Health Surveys 1995-1996 and 2005-2006 and estimates Heckman sample selection, cluster fixed-effects and household fixed-effects econometric models. The dependent variables are the child’s enrolment status and conditional on enrolment child’s years of schooling. Findings – This analysis finds statistically significant evidence of male advantage both in schooling enrolment as well as years of schooling. However, using a cluster fixed-effects model, our analysis finds that within a village, conditional on being enrolled, girls spend more years in school relative to boys. Other results show that parental schooling has a positive and statistically significant impact on child schooling. There is statistically significant wealth effect, community effect and regional disparities between states in India. Originality/value – The large sample size and the range of questions available in this data set, allows us to explore the influence of individual, household and village level social, economic and cultural factors on child schooling. The role of gender on child schooling within a village, intrahousehold resource allocation for schooling and regional gender differences in schooling are important issues in India, where education outcomes remain poor for large segments of the population.

The universal provision of primary education: who benefits?

Few studies have investigated the causal spillover effects of compulsory education on children's siblings. Using a regression discontinuity method, I find that Hong Kong's 1971 free compulsory primary education policy reduced the dropout probability for the eldest siblings of full policy beneficiaries, especially for children in low-income families. Having younger brothers who were full policy beneficiaries did not affect the elder child's educational attainment. Having younger sisters who were full policy beneficiaries increased the eldest child's educational attainment, especially for the eldest sister. The results shed light on how sibling sex composition might affect intra-household resource allocation of human capital investment among children.

Gender Discrimination in the Allocation of Migrant Household Resources.

This paper considers the relationship between international migration and gender discrimination through the lens of decision-making power over intrahousehold resource allocation. The endogeneity of migration is addressed with a difference-in-differences style identification strategy and a model with household fixed effects. The results suggest that while a migrant household head is away, a greater share of resources is spent on girls relative to boys and his spouse commands greater decision-making power. Once the head returns home, however, a greater share of resources goes to boys and there is suggestive evidence of greater authority for the head of household.

Gender Discrimination in the Allocation of Migrant Household Resources

This paper considers the relationship between international migration and gender discrimination through the lens of decision-making power over intrahousehold resource allocation. The endogeneity of migration is addressed with a difference-in-differences style identification strategy and a model with household fixed effects. The results suggest that while a migrant household head is away, a greater share of resources is spent on girls relative to boys and his spouse commands greater decision-making power. Once the head returns home, however, a greater share of resources goes to boys and there is suggestive evidence of greater authority for the head of household.

Gender Disparity in Education Enrollment in Pakistan

The paper examines the determinants of school enrollment in Pakistan. The likelihood of school enrollment is estimated using separate logistic regression models for three different age groups. The empirical results indicate severe gender disparity in school enrollment across all age groups, particularly among the older age groups. Although the rate of school enrollment is positively associated with household income, the gender disparity actually deteriorates with an increase in household income for the middle-income households. This study failed to find any evidence that gender disparity can be attributed to discrimination in intra-household resource allocation.

The Marriage Market, Labor Supply and Education Choice

We develop an equilibrium lifecycle model of education, marriage and labor supply and consumption in a transferable utility context. Individuals start by choosing their investments in education anticipating returns in the marriage market and the labor market. They then match based on the economic value of marriage and on preferences. Equilibrium in the marriage market determines intrahousehold allocation of resources. Following marriage households (married or single) save, supply labor and consume private and public commodities under uncertainty. Marriage thus has the dual role of providing public goods and offering risk sharing. The model is estimated using the British HPS.

Sex imbalance, marital matching and intra-household bargaining: Evidence from China

This paper studies the effects of sex imbalance on matching patterns in China's marriage markets. We hypothesize that the economic inequality caused by economic liberalization, together with sex imbalance, will lead to women's hypergamy (marrying up). Employing CGSS data, our empirical findings support the hypothesis. We also establish that sex imbalance enhances the postnuptial bargaining power of the wife vis-à-vis the husband in intra-household resource allocation. The findings are robust to IV estimation and robustness checks.

Intra-Household Resource Allocation under Negative Income Shock: A Natural Experiment

Summary Using households from coastal districts in Bangladesh, as a case, and applying the difference-in-difference estimation method, this paper demonstrates a gender-differentiated outcome of negative income shocks for education expenditures of households. The cyclonic disaster that reduced crop income substantially increased the demand for labor as well as wages for rebuilding damaged farms. This in turn increased the opportunity costs of boys’ schooling, as reconstruction is a male-friendly sector. Consequently, parents withdrew their sons from school and engaged them in their households’ repair work and/or in wage-earning activities. However, girls’ schooling expenditure was unchanged in the affected farm and non-farm households.

How do sex ratios in China influence marriage decisions and intra-household resource allocation?

This article examines how imbalanced sex ratios influence marriage decisions and household bargaining. Using data from the 1982 Chinese census, the traditional "availability ratio" is modified to reflect the degree to which men tend to marry women from different cohorts. This ratio reflects the average tendency of men to prefer women who are close in age to women who are several years younger than them by weighting cohort sizes using the proportion of people in the population who marry someone born in a different cohort. Given that men generally marry younger women, this ratio varies independently of the size of one's own birth cohort. Yet, the ratio fluctuates considerably across individuals, as the sizes of birth cohorts in China vary across time and regions. This enables us to examine how variability in such ratios may influence marriage decisions and household bargaining. The findings suggest that women exercise greater bargaining power once married. Results indicate that as women become scarcer in the marriage market, they have healthier sons. Men also delay marriage, and consume less tobacco and alcohol. This paper also highlights how sensitive findings may be to using this modified weighted availability ratio rather than a traditional unweighted availability ratio.

Parental Choices and Children’s Skills: An Agent-Based Model of Parental Investment Behavior and Skill Inequality Within and Across Generations

An agent-based simulation model (ABM) is developed and implemented using Python to explore the emergence of intragenerational and intergenerational skill inequality at the societal level that results from differences in parental investment behavior at the household level during early stages of the life course. Parental behavior is modeled as optimal, heuristic-based, or norm-oriented. Skills grow according to the technology of skill formation developed in the field of economics, calibrated with empirically estimated parameters from existing research. Agents go through a simplified life course. During childhood and adolescence, skills are produced through parental investments. In adulthood, individuals find a partner, give birth to the next generation, and invest in offspring. Number and spacing of children and available resources are treated as exogenous factors and are varied experimentally. Simulation experiments suggest that parental decisions at the household level play a role in the emergence of inequality at the societal level. Being egalitarian or not is the most important distinction in parental investment behavior, while optimizing parents generate similar results as egalitarian parents. Furthermore, there is a tradeoff between equality at home and inequality at the macro-level. Changes in the environment reduce or exacerbate inequality depending on parental investment behavior. One prediction of the model on intragenerational inequality in cognitive skills was validated with the use of empirical data. The simulation can best be described as a middle-range model, informed by research on skill formation and the intrahousehold allocation of resources. It is a first step toward more complex ABMs on inequality from a life course perspective. Possible model extensions are suggested. The Overview, Design Concepts, and Details (ODD) protocol and Design of Experiments (DOE) were used to document the model and set up the experimental design respectively.

Early Health Shocks, Intrahousehold Resource Allocation, and Child Outcomes

An open question in the literature is whether families compensate or reinforce the impact of child health shocks. Discussions usually focus on one dimension of child investment. This paper examines multiple dimensions using household survey data on Chinese child twins whose average age is 11. We find that, compared with a twin sibling who did not suffer from negative early health shocks at ages 0-3, the other twin sibling who did suffer negative health shocks received RMB 305 more in terms of health investments, but received RMB 182 less in terms of educational investments in the 12 months prior to the survey. In terms of financial transfers over all dimensions of investment, the family acts as a net equalizer in response to early health shocks for children. We estimate a human capital production function and establish that, for this sample, early health shocks negatively affect child human capital, including health, education, and socioemotional skills. Compensating investments in health as measured by BMI reduce the adverse effects of health shocks by 50%, but exacerbate the adverse impact of shocks on educational attainment by 30%.

Intrahousehold Resource Allocation: Do Parents Reduce or Reinforce Child Ability Gaps?

Do parents invest more or less in their high-ability children? We provide new evidence on this question by comparing observed ability differences and observed investment differences between siblings living in the United States. To overcome endogeneity issues, we use sibling differences in handedness as an instrument for cognitive ability differences. We find that parents invest more in high-ability children, with a 1 standard deviation increase in child cognitive ability increasing parental investments by approximately one-third of a standard deviation. Consequently, differences in child cognitive ability are enhanced by differential parental investments.