I’m attending Growth Week at LSE, where there are more papers worth blogging than blog time available.
Empirical evidence suggests that money in the hands of mothers (as opposed to their husbands) benefits children. Does this observation imply that targeting transfers on women is good development policy? We develop a series of non-cooperative family bargaining models to understand what kind of frictions can give rise to the observed empirical relationships…
One key question is why women invest more in children, rather than buying alcohol or tobacco as men seem prone to do…
If the underlying differences are biological in nature, giving more power to women should always benefit children. If, on the other hand, at least some of the behavioral differences are themselves due to gender discrimination [i the wage labor market], promoting gender equality would result in women becoming more like men, potentially lowering the benefits for children.
…we show that a gender wage gap can lead women to specialize in home production and therefore act like they have a higher weight on children relative to their husbands. We also also show that gender differences in investment opportunities can lead women to act like they value children relatively more.
The paper, by Matthias Doepke Michele Tertilt, is a good example where microeconomic theory can help us understand the potentially unexpected effects of popular programs.
Another nice point they make: if men have more “investment” opportunities than women, giving money to women might lower household income in the longer run and come at the expense of child welfare.
Their main point: we don’t have the answer one way or the other. We have jumped to the conclusion that investing in women is better for children from looking at a few cases of the very poor, and if we understand the mechanism better, we’ll understand which policies will work best, for whom, and how long.
For the record, my money is on deep social and possibly biological differences, implying we ought to give the money to women. But that is idle speculation.
3 Responses
@Tim Ogden: that’s an extreme example. Look at your local newspaper, where education is covered under “women’s issues” on the “lifestyle” page for a modern US example.
The targeted transfers of money in the hands of women rather than men may not be true in all region of the world. For example, in the sub-continent (India, Pakistan, Bangladesh, sri Lanka), it has been observed that women spend more on themselves rather than on their children . The women spend more lavishly on jewellery, make up and clothes which are the more expensive livelihood items and the men save more. The husbands spend a very little money on alchol and cigars due to various religious and cultural constraints. This argument my sounds funny but holds field in the sub-continent.
The thing I’ve never understood about this argument is that it doesn’t hold true for the history of developed countries. Just poll a room of people anywhere in the world and ask them how many had fathers that spent all their income on booze and cigarettes. It’s pretty rare (though more common in some contexts, of course).
If we look at the history of Europe or recent development in China and the Asian tigers it also does not hold true. Men in most societies don’t ignore their children but actively invest in them.
So why should we believe that there is something inherent in men from Africa and Latin America (where these claims about the behavior of men are overwhelmingly focused) are different?