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Income and bargaining effects on education and health

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  • Ponczek, Vladimir Pinheiro

Abstract

In this paper, we examine the impacts of the reform in the rural pension system in Brazil in 1991 on schooling and health indicators. In addition, we use the reform to investigate the validity of the unitary model of household allocation by testing if there were uneven impacts on those indicators depending on the gender of the recipient. The main conclusion of the paper is that the reform had significantly positive effects on the outcomes of interest, especially on those co-residing with a male pensioner, indicating that the unitary model is not a well-specified framework to understand family allocation decisions. The highest 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 representation for 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. The data support the existence of these two different effects

Suggested Citation

  • Ponczek, Vladimir Pinheiro, 2010. "Income and bargaining effects on education and health," Textos para discussão 216, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
  • Handle: RePEc:fgv:eesptd:216
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    File URL: http://bibliotecadigital.fgv.br/dspace/bitstream/10438/6553/1/TD%20216-%20Vladimir%20Ponczek.pdf
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    1. O'Flaherty, Brendan & Siow, Aloysius, 1995. "Up-or-Out Rules in the Market for Lawyers," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 709-735, October.
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    Cited by:

    1. Wang, Shing-Yi, 2014. "Property rights and intra-household bargaining," Journal of Development Economics, Elsevier, pages 192-201.
    2. 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, vol. 60(2), pages 399-435.
    3. Tabea Herrmann & Attakrit Leckcivilize & Juliane Zenker, 2017. "The Impact of Cash Transfers on Child Outcomes in Rural Thailand: Evidence from a Social Pension Reform," PIER Discussion Papers 77, Puey Ungphakorn Institute for Economic Research, revised Dec 2017.
    4. repec:sbe:breart:v:29:y:2009:i:2:a:3442 is not listed on IDEAS

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