Three essays on household decision-making

Abstract

This thesis consists of three empirical studies in China that address issues of intra-household resource allocation. In Chapter 1, I apply a collective decision-making model to financial transfers from a married couple to their respective parents, where transfers to each set of parents are treated as consumption goods exclusively consumed only by the corresponding spouse. Restrictions imposed by the collective model cannot be rejected. A wife who contributes relatively more income to the household could transfer more to her own parents. The results also suggest that marrying an older or better-educated husband would increase the decision power of a female within marriage. Chapter 2 estimates the effects of a legislative change in the rules governing post-divorce property division, utilizing the implementation of Interpretation III of the Marriage Law in 2011. I identify couples where wives were expecting a smaller share of marital property upon divorce under this new regulation as the treatment group, as well as those who were not largely exposed. A difference-in-differences strategy with individual-level fixed effects is then employed. Compared with their counterparts in the control group, wives being treated increased their time spent on income-generating activities. Both wives and husbands in the treatment group reduced their housework hours. Chapter 3 focuses on spouses living separately during China's rural-urban migration process. With transfers between spouses explicitly observed, each person's access to household resources and its determinants can be estimated. After accounting for the selection into split couples, estimation results are generalized to all rural couples for a simulation of the distribution of individually controlled income. Total income level and each spouse's contribution are significant predictors in the sharing function, which favors husbands who receive a larger share of income in wealthier households. The simulation results highlight the importance of taking into account intra-household inequality.