Determinants and Consequences of Bargaining Power in Households
Abstract
A growing literature offers indirect evidence that the distribution of bargaining power within a household influences decisions made by the household. The indirect evidence links household outcomes to variables that are assumed to influence the distribution of power within the household. In this paper, we have data on whether a husband or wife in the Health and Retirement Study %u201Chas the final say%u201D when making major decisions in a household. We use this variable to analyze determinants and some consequences of bargaining power. Our analysis overcomes endogeneity problems arising in many earlier studies and constitutes a missing link confirming the importance of household bargaining models. We find that decision-making power depends on plausible individual variables and also influences important household outcomes, with the second set of results much stronger than the first set. Current and lifetime earnings have significant but moderate effects on decision-making power. On the other hand, decision-making power has important effects on financial decisions like stock market investment and total wealth accumulation and may help explain, for example, the relatively high poverty rate among widows.Download Info
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12367.Length:
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:nbr:nberwo:12367
Note: AG
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Keywords:Other versions of this item:
- Leora Friedberg & Anthony Webb, 2006. "Determinants and Consequences of Bargaining Power in Households," Working Papers, Center for Retirement Research at Boston College wp2006-13, Center for Retirement Research, revised Jun 2006.
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- D14 - Microeconomics - - Household Behavior - - - Personal Finance
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-08-05 (All new papers)
- NEP-FIN-2006-08-05 (Finance)
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
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