Female empowerment and child welfare are important issues in today's development policies. For example, in 2009-10, 31\% of total bilateral aid by the OECD Development Assistance Committee's members were in support of gender equality, and approximately 10\% were in support of education (OECD, 2012). The awarding of the Nobel Peace Prize 2014 to Kailash Satyarthi and Malala Yousafzay "…for their struggle against the suppression of children and young people and for the right of all children to education" also emphasizes the importance of these two issues. It is generally assumed that by targeting women, their children will benefit. However, the evidence in the literature is mixed. In this project, we want to contribute to the literature by studying whether women invest more in their children than men do and what the potential reasons for this might be.
The research questions are the following:
1. Is child welfare influenced by whether additional resources to the household are allocated to women or men?
2. What are the underlying mechanisms determining resources spent on children in the household?
The results from the study will provide insights on both research questions and inform the development policy debate about how to strengthen child welfare. They will also contribute to the economic theoretical literature on household models.
Concerning the first research question, many studies have shown that there is a relationship between gender and household expenditures. To illustrate, in Kenya and Malawi, Kennedy and Peters (1992) find that female-headed households spend a larger share of total income on food and a smaller share on alcohol compared to male-headed households. Similarly, Hoddinott and Haddad (1995) use data from Côte d'Ivoire and find that when the female income share in the household is increased, the share of household income spent on food increases, and the share spent on alcohol and cigarettes decreases.
The assumption that women spend more resources on their children than men leads us to the second research question: What are the mechanisms determining the amount of resources spent on children? First, women and men may have different preferences. If women assign a higher weight to children's welfare in their utility function, they will allocate more resources to their children than men. Similarly, if women are more patient than men are, they will be more willing to invest in their children as this investment yields a long-term return. On the other hand, if women are more risk averse than men, they will be less willing to invest in their children than men as this investment is risky. Second, the difference might be due to bargaining power. Assume that women and men care equally much about their children. In a situation where the men have all the bargaining power and hence make all the decisions, they have to bear all the costs of investing in their children, whereas both adults in the household benefit. Increasing female bargaining power implies that the cost of investing in the child is split between the two adults, and the benefit remains the same for both. In this case, investment in children would increase (Basu, 2006).
The theoretical framework of this project derives from household models. In the literature, household models are divided into two categories; unitary and non-unitary household models. In unitary household models, the household is considered as one unit maximizing a single utility function (Lundberg and Pollak, 1996. As this model has several limitations, we will focus on non-unitary household models. In particular, one cooperative model and one non-cooperative model. The cooperative model we use is the collective household model developed by Chiappori (1992) and Browning and Chiappori (1998). This approach relies on two assumptions; there exists a stable decision process in the household and this process leads to Pareto-efficient outcomes (Browning, Chiappori and Weiss, 2014). By using this framework, Basu (2006) finds that children in a household is less likely to work if the power structure is balanced. The non-cooperative household model used in this project is developed by Browning and Lechene (2001). In this approach, agents chose their strategies simultaneously and independently. Each individual act as an independent agent conditional on the action of the other. In other words, the individual maximizes his or her utility subject to his or her budget constraint taking into account the actions of his or her spouse. The solutions need not be Pareto efficient (in the sense that it may be possible to improve the utility of one of the spouses without reducing the utility of the other spouse). In this case, going from a situation in which the woman has no bargaining power to a situation in which the woman has some bargaining power, will decrease investments in children.
To answer the research questions, we have designed a lab experiment to be conducted in the field in Dar es Salaam, Tanzania. We have invited married couples with at least one child of primary school age to the lab in July and August 2015. The experiment will consist of three parts. In the first part we elicit time and risk preferences (incentivized choices) to study whether men and women have different preferences for investing in children. In the second part of the experiment, the participant will make an incentivized distributive choice. The choice they make is an allocation between themself, their spouse and their child (1/3 of participants make this decision on their own, 1/3 bargain over the decision with their spouse and 1/3 simply observes their spouse's choice). The idea here is to experimentally vary female bargaining power to investigate whether an increase in female bargaining power causally changes how much is invested in the child. In the third part of the experiment, the participants will answer four non-incentivized questions about the decision-making in their household. These questions are intended to measure bargaining power within the household. In addition, before starting the experiment, the participants will answer a set of standard background questions.