Lecture 7: Family and Gender

Family

I Household decisions are taken jointly by parents. Siblings,

grand-parents, and even the concerned child, may have a role as
well.
I Women and men have different preferences. For example, women
and men have often very different views about how many children
they want to have. That is not very surprising since women bear
the physical risks and cost of having children.
I Within a given family, people are different (e.g. one could be more
or less patient, more or less interested in education, etc.).
I While the family is patriarchal in many developing countries,
women still make a number of decisions or participate in them.
Pareto Efficiency

I Pareto efficiency is a state of allocation of resources from which

it is impossible to reallocate so as to make any one individual
better off without making at least one individual worse off.
I If a set of allocation is NOT Pareto efficient, there exists a clearly
better allocation if individuals cooperate. That is, there can be an
unanimous agreement to reallocate the resources to make at least
one individual better without hurting others.
I “Pareto efficiency” is considered as a minimal notion of efficiency.
It makes no statement about equality.
Pareto Efficiency

I One example when Pareto Efficiency is violated

I If individuals behave strategically and are not willing to make a
collective decision to allocate resources, then it is POSSIBLE
(not necessary, though) to have allocation that is NOT Pareto
Efficient.
I e.g. Prisoner’s Dilemma
I Because a family consists of many individuals, depending on how
they make decisions (collective or non-collective), the allocation
across family members may or may not be Pareto Efficient.
I If a family does not achieve Pareto efficient allocation, that means,
they have strategic interactions.
I Understanding how families allocate resources across members is
informative to design a more effective policy (for example, who
should be the one who receives the child subsidy? contraceptive?)
Unitary vs. Non-Unitary

I Unitary model (Efficient):

I the family makes decision as if it were just one individual.
I family members make a collective decision.
I the resulting allocation should be Pareto efficient.
I when it comes to the production process, one necessary
condition to achieve Pareto efficient allocation is to maximize
the sum of income (resources) of the household members
I when it comes to allocating resources across family members,
one necessary condition to achieve Pareto efficient allocation
is to share all resources and information together so that they
can achieve a common goal as a family
I Non-unitary model:
I each member behaves strategically to increase his/her own
share (e.g. bargaining)
I the resulting allocation is not necessarily Pareto efficient (e.g.
if a wife and a husband only cares about their own payoff, they
might end up choosing actions that hurt both of them)
Efficient Household Model

I Family members (compared to other groups like

friends/colleagues) seem to have a greater incentive to achieve
Pareto Efficient allocation.
I Rationale: family members have long-term relationship so that it
might be each member’s own interest to achieve efficiency first;
family members try to do as well as they can (maximize the size of
the pie) as a family
I Udry tested whether families achieve Pareto efficiency.
Efficient Household Model

I In rural Burkina Faso, each household member works on a separate

plot
I Each household would have fixed amount of input available
(endowment: family labor, fertilizer, etc.)
I One necessary condition to achieve Pareto Efficient allocation is to
maximizes the total resources available to the family. Thus, if the
family aims to achieve Pareto Efficiency, family members have to
decide collectively to maximize the total output by properly
allocating resources across two plots
I If the marginal productivity of one input is higher in one plot, then
by allocating more input in the other plot, the family can increase
the total output
Evidence from Burkina Faso

I Specifically, he tested whether the inputs used on plots own by

men and by women, and the overall productivity of the plots, was
different.
I He found that, even if we restrict our attention to plots where the
same crop is farmed, in the same year, and in the same family,
women’s plots:
1. Receive less fertilizer, less male labor, less child labor.
2. Are less productive (yield per hectare).
I Households could be 6% richer just be re-allocating resources: they
leave money on the table.
I Why is the family inefficient?
Evidence from Burkina Faso

I What’s going on here?

I What the husband grows on his plot seems to determine what he
gets to consume
I What is the evidence?
I In Cote d’Ivoire, usually men and women grow different crops
(men: coffee and cocoa, women: bananas, vegetables, and
other staples)
I Weather has different impact on different crops
I Weather is an exogenous shock
I In good “male” year: more spending on alcohol, tobacco,
personal luxury items for men
I In good “female” year: little indulgences for women, more
food consumption
Evidence from Burkina Faso

I Puzzle: why spouses do not provide insurance to each other even

though they have a long-term relationship?
I Not effective informal insurance
I To some extent, husband and wife might behave strategically like
players in a game who only cares about his/her own payoff
I However, there is also alternative explanation for this inefficiency:
families are bound by incomplete, very coarse, and loose
“contract”
I social norm imposes some restriction on their behaviors: for
example, husband and wife shall not use Yams to buy personal
item. Yams are for fees for school or medical care for children
I it is not perfect, though
I roles within the family is defined in a coarse way: for example,
the wife has to be in charge of feeding family. The husband
just gives a fixed amount of money to the wife.
Evidence from Burkina Faso

I Moreover, social norms change very slowly

I Married daughters are not expected to take care of their
parents in Indonesia
I Although parents took care of her kid, the daughter did not
care for parents’ health
I Given the incomplete nature of the contract, it seems difficult for
policy makers to implement sophisticated policies
I Better understanding of how family works should be the starting
point of implementing effective policies
Does Private Information Matter?

I The case of fertility: Lusaka, Zambia (Ashraf, et. al., 2010)

I Many women report hiding contraceptive use from their husbands.
I Would an intervention that involves men and women together have
a larger or smaller effect than an intervention that involves just
women? Or would they be the same?
I Important policy question: should men be involved or left out?
I Randomly assigned a voucher for a quick appointment with family
planning nurse either to wife alone OR to wife and husband
together.
I Are women more likely to take up the voucher when they are
spoken to alone? Or when they are spoken to with husband? What
could we expect?
Results

I Results indicate that women in the couples treatment were 10.3%

less likely to seek family planning services (redeem vouchers) than
women in the individual treatment.
I A responder is defined as a women who doesn’t want a child in the
next two years who believes her husband wants to have more
children than they currently have and who also believes her
husband wants more children than she does.
Result
Does Bargaining Power Matter?

I These results show clearly that the family is not a unitary

happy-family that makes all decision together.
I Even when the information set is the same for both partners, they
may bargain over family decisions: who works how hard, how much
to feed the children, etc.
I What is likely to affect women’s bargaining power?
I Property rights
I Marriage markets
I Ability to earn an independent income
I Own resources
I Education
I Etc.
Missing Women

I Amartya Sen, has claimed that there are a 100 million missing
women. What are “missing women”?
I Ratio of the number of females to the number of males in 1986:

Europe 1.05
Sub-Saharan Africa 1.022
North Africa 0.96
South East Asia 1
China 0.94
Bangladesh 0.94
India 0.93
Pakistan 0.91
Is Development the Answer?

I No perceptible trend in sex ratios in India. Perverse trend in China.

I Negative correlation with the level of development within country.
I Perhaps the relationship is hump shaped. The case of South Korea
indicates that this may be the case.
Why are we Losing Girls: Tradition?

I Neglect of girls: Maybe they are not fed enough?

I Perhaps girls die more in emergencies?
I Elaina Rose’s study of droughts in India looks at the fraction of
surviving children who are girls in a drought year versus a
non-drought year and finds that girls die more in droughts.
I However droughts are not common enough to explain the
magnitude.
Why are we Losing Girls?

I In China today it is unlikely that extreme events of this kind are

common.
I Dependence on agriculture has fallen massively in both India and
China.
I Share of girls is falling in China and is unchanged in India (actually
falling in rich areas).
I There is evidence that medical technology is being used to identify
gender and carry out selective abortions.
An Economic Dimension?

I Liberalisation of agriculture under the household responsibility

system in China led to an increase in the production of cash crops
(tea, orchards, vegetables) relative to cereals after 1979.
I Tea is a crop where women have a comparative advantage, whereas
men have a comparative advantage in picking orchard fruits.
I What would you expect to see if you estimate the effect of being
born in a tea planting region on the sex ratios (male/female) after
the reforms? What do you expect in the orchard regions?
I Interestingly there is also a marked effect on girl’s education
attainment.
Qian (2008)
I Price change after the reform
I Note. Cat1 (Category 1) crops: grain/all oil crops, cotton)
Qian (2008)
Qian (2008)
Marriage Market Forces

I What will happen in the marriage market in India or China

I What effect do we expect on the bride price or dowry?
I What would be the effect of population growth if men marry
younger women?
I What happens when population growth slows?
Readings

I Chapter 5, Poor Economics

I Qian ‘‘Missing Women and the Price of Tea in China:
The Effect of Sex-Specific Earnings on Sex
Imbalance’’ QJE 2008
I Ashraf, Field, and Lee ‘‘Household Bargaining and
Excess Fertility: An Experimental Study in Zambia’’
AER 2014