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Income and bargaining effects on education and health


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  • Ponczek, Vladimir Pinheiro


In this paper, we examine the impacts of the reform in the rural pension system in Brazil in 1991 onschooling and health indicators. In addition, we use the reform to investigate the validity of the unitarymodel of household allocation by testing if there were uneven impacts on those indicators depending onthe gender of the recipient. The main conclusion of the paper is that the reform had significantly positiveeffects on the outcomes of interest, especially on those co-residing with a male pensioner, indicating thatthe unitary model is not a well-specified framework to understand family allocation decisions. Thehighest impacts were on school attendance for boys, literacy for girls and illness for middle-age people.We explore a collective model as defined by Chiappori (1992) as one possible alternative representationfor the decision-making process of the poor rural Brazilian families. In the cooperative Nash equilibrium,the reform effects can be divided into two pieces: a direct income effect and bargaining power effect. Thedata support the existence of these two different effects

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Paper provided by Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil) in its series Textos para discussão with number 216.

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Date of creation: 05 May 2010
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Handle: RePEc:fgv:eesptd:216

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Cited by:
  1. Irineu Evangelista de Carvalho Filho, 2012. "Household Income as a Determinant of Child Labor and School Enrollment in Brazil: Evidence from a Social Security Reform," Economic Development and Cultural Change, University of Chicago Press, University of Chicago Press, vol. 60(2), pages 399 - 435.
  2. Shing-Yi Wang, 2013. "Property Rights and Intra-Household Bargaining," NBER Working Papers 19427, National Bureau of Economic Research, Inc.


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