Alessandra Voena on Economics of the family in developed and developing countries

Alessandra Voena is Associate Professor in Economics at the University of Chicago. She is an applied microeconomist, working primarily in labor and also in development economics. Voena's RePEc/IDEAS profile.

The main area of inquiry of my research is the economics of the family and it broadly studies the process of household decision making and its implications for economic policy. Since Becker (1991), the economics of the family has been an active research field. Recent developments combine economic models, which often feature a quantitative component, with data from a wide range of sources to study questions that are relevant for policy in developed and in developing countries.

Part of my research examines the process of household decision making and its implications for economic policy. I study whether household members behave cooperatively, whether they can commit to future actions or whether they face barriers to commitment, and whether decisions suffer from asymmetric information problems. I also study how the nature of these interactions shape the behavior of families over time, and in particular their savings, labor supply, and fertility decisions, their household-specific investments, and their educational choices. Ultimately, I want to learn how policies and institutions, both in developed and in developing countries, can affect economic outcomes by changing the family structure and how family members (e.g., husband and wife, parents and children) interact. In what follows, I describe a number of studies that are contributing to these goals.

Family decisions and government policy

In Voena (2015), I study how divorce laws influence intra-household decision making and hence household intertemporal behavior. During the 1970s and 1980s, most U.S. couples entered a legal system which allows each spouse to obtain a divorce without the consent of the other party (unilateral divorce) and to keep a fraction of the marital assets, independently of who holds the formal title to the property (equitable distribution of property). To capture the effect of this legal shift on household behavior, I build a dynamic model that captures the key aspects of these laws. In the model, the transition from mutual consent divorce to unilateral divorce introduces a limited commitment problem in marriages (Mazzocco, 2007; Chiappori and Mazzocco, 2017), because spouses can obtain a divorce without the consent of the other party. I exploit the variation in divorce laws over time and across states to study how these legal changes affected the endogenous variables of the model and to estimate the structural parameters of the dynamic model by indirect inference. The estimates indicate that wives' weight in household decision making is substantially smaller than the husbands' weight, and hence an equal division of property grants women more assets than a separate property regime. Also, introducing unilateral divorce in states that divide assets equally changes the intra-household allocation in marriage in favor of women and increases their leisure time. The counterfactual simulations suggest that divorce laws play an important role in shaping intra-household risk sharing and consumption smoothing in case of divorce. Recent studies have also explored the effect of divorce laws on welfare (Fernández and Wong, 2017), educational decisions (Bronson, 2016), and on marital sorting (Reynoso, 2018).

Models of dynamic household decision making with limited commitment have been shown to be consistent with the dynamics of intra-household allocations (Lise and Yamada, forthcoming). They can be used to study policy changes that are likely to affect family formation and dissolution together with other crucial policy outcomes, such as labor supply. In Low, Meghir, Pistaferri, and Voena (2018), we apply such a model to study the impact of welfare reform, and in particular of time-limited eligibility to welfare programs. We extend the framework from Voena (2015) by incorporating the decision to marry in a marriage market with search frictions. Such a decision, like the decision to divorce, is likely to be affected by changes in the generosity of the welfare system because single mothers are the most frequent recipients. Indeed, we use variation generated by the 1996 U.S. welfare reform to provide reduced form evidence showing that time limits led to a fall in welfare claims, a rise in employment, and a decline in divorce rates among low-educated mothers. Based on the estimates from the model, which reproduces the reduced form results, we show that, instead of relying on welfare single mothers work more, more mothers remain married, and some move to rely only on food stamps. In ex-ante terms, even after accounting for government savings, women are made substantially worse off by the reform.

In ongoing work entitled "Prenuptial Contracts, Labor Supply and Household Inve stments" (with Denrick Bayot), we revisit the limited commitment model to study the plausible outside options to marital cooperation. In particular, we examine couples' choices of assets regime at the time of marriage in Italy. The majority of newlyweds (67% in 2011) choose to forgo the default community property regime and to maintain a separate property, in which each spouse gets to keep assets in his or her name upon divorce. We use restricted administrative data from the Italian Statistical Institute to document that households in which the wife doe s not work or works part-time and that have children are more likely to be in a community property marriage. To interpret these facts, we develop a model in which community property provides insurance for mothers who forgo labor market experience to specialize in home production. We show that in a dynamic model of risk sharing with limited commitment in which spouses make ex post efficient decisions and cooperate throughout the marriage, separation of property is the constrained efficient property division system. Hence, to explain why many couples choose community property, we depart from the standard setup and allow spouses to opt out of marital cooperation. We show that if non-cooperation is possible within marriage, separate property may no longer be the constrained efficient property division regime: couples may prefer to commit to an equal division of property if they anticipate that the allocation of assets will otherwise depart from the one that rewards spouses for their household-specific investments.

Like limited commitment, barriers to communication can influence the economic behavior of households and require a policy intervention. In an ongoing experimental study (currently in preparation under the working title "Maternal Mortality Risk and the Gender Gap in Desired Fertility," with Nava Ashraf, Erica Field and Roberta Ziparo), we study whether health education programs can help overcome communication barriers that prevent the diffusion of information on maternal health risk from wives to husbands, and ultimately influence fertility outcomes.

Spousal disagreement over the desired number of children is believed to be a significant factor in slowing down demographic transitions in Sub-Saharan Africa, where fertility rates have remained high even as women's desired fertility declines. Doepke and Kindermann (2016) also show that it has substantial implications on fertility rates in rich countries. We develop a cheap-talk model in which an initial gender gap in ideal fertility prevents effective communication between spouses about the costs of childbearing incurred by women. This friction is likely to further widen the fertility disagreement in environments where maternal health risk is high and imperfectly observed, and where men have fewer opportunities than women to learn about average and relative risk. To assess the importance of this channel, we design an intervention to experimentally vary exposure to information about maternal health risk to either the husband or the wife on a sample of approximately 500 couples in peri-urban Lusaka (Zambia). At baseline, husbands are less knowledgeable about maternal mortality and morbidity compared to their wives. When the husbands randomly receive information about maternal health risk, they report lower desired fertility and couples experience a sharp decline in the probability of having a child in the year following the intervention (a 46% reduction) and increase communication about family planning. Both spouses report improvements in marital satisfaction. Couples in which it is the wife who receives maternal mortality information do not exhibit a similarly consistent pattern of behavioral change. These findings indicate that understanding communication and information diffusion in the household can strengthen the efficacy of information campaigns and improve household outcomes.

Family decisions and institutions in developing countries

In developing countries, it is often the case that traditional institutions and culture, rather than statutory government law and policy, regulate family relations. Hence, traditional practices can have significant consequences on economic outcomes. An interesting and important example is polygyny (Tertilt, 2005; Rossi, forthcoming). Another example is inheritance: in Dillon and Voena (2018) we show that customary rules that prevent Zambian women from inheriting land in case of their husband's death are associated with lower land investment (fallowing , fertilizer application, and labor-intensive tillage techniques) even while the husband is alive. Two of my recent papers examine the implications of the relationship between institutions and economic behavior for the design and the evaluation of economic policy.

In Ashraf, Bau, Nunn, and Voena (forthcoming) we explore the link between investments in education and the cultural practice of bride price, which is a transfer from the groom to the family of the bride and is widespread in Sub-Saharan Africa and parts of Asia. We develop a model of parental educational investment with two-sided matching in the marriage market (Chiappori, Iyigun, and Weiss, 2009), in which the custom of bride price compensates parents for the upfront costs of schooling. Because bride price raises the parents' returns to educating a daughter, it introduces a systematic difference in average educational attainment between ethnic groups. Such a difference leads to heterogeneous responses to a decline in the cost of schooling. To test the predictions of the model, we revisit an important historical development projects, the Indonesia Sekolah Dasar INPRES school construction program. Under this program, the Indonesian government built over 61,000 primary schools between 1973 and 1978. Previous studies have found large effects of this program on male educational attainment and no effects on female educational attainment (Duflo, 2001). We show that there is crucial heterogeneity in the effect on females by bride price tradition, with only ethnic groups that traditionally engage in bride price payments at marriage increasing female enrollment in response to the program. Within these ethnic groups, higher female education at marriage is associated with a higher bride price payment received. For those girls belonging to ethnic groups that do not engage in this practice, we see no change in education rates following school construction. We replicate the same findings using survey and administrative data we gathered in Zambia, where we study another school expansion program that took place in the early 2000s and which had never been studied before.

In Corno, Hildebrandt, and Voena (2017), we study how aggregate economic fluctuations affect marriage markets -- and especially child marriage -- in economies where marriage payments prevail. In particular, we contrast Sub-Saharan Africa, where bride price is prevalent, and in India, where dowry is prevalent. In an equilibrium model in which parents choose when their children marry, transitory income shocks affect the age of marriage because marriage payments are a source of consumption smoothing, particularly for a woman's family. As predicted by our model, we show that droughts, which reduce annual crop yields by 10 to 15%, have opposite effects on the marriage behavior of a sample of 400,000 women in the two regions: in Sub-Saharan Africa, they increase the annual hazard into child marriage by 3%, while in India droughts reduce such a hazard by 4%. In addition to improving our understanding of marriage markets in developing countries, these findings point to the importance of culture and institutions in influencing the external validity of natural experiments. They also highlight the value of economic theory in guiding empirical and experimental analyses in different contexts, to improve our understanding of the economic mechanisms behind empirical results.

In ongoing work with Lucia Corno, entitled "Selling daughters: age of marriage, income shocks and the bride price tradition", we further explore the quantitative role of marriage payments as a source of consumption smoothing. We develop a dynamic life structural model in which households are exposed to income volatility and have no access to credit markets. If a daughter marries, the house hold obtains a bride price and has fewer members to support. In this framework, girls have a higher probability of marrying early when their parents have a higher marginal utility of consumption because of adverse income shocks. To isolate the role of the bride price custom for consumption smoothing, we estimate the model by exploiting variation in rainfall shocks over a woman’s life cycle, using a survey dataset from rural Tanzania. In counterfactual exercises, we show that parents heavily rely on child marriages and bride price payments to smooth consumption. Without credit markets, bans on these practices are costly for a daughter’s parents. However, ensuring access to credit limits the costs that parents face, making bans more likely to succeed.


Ashraf, N., N. Bau, N. Nunn, and A. Voena (forthcoming): "Bride price and female education," Journal of Political Economy.

Becker, G. S. (1991): "A Treatise on the Family." Harvard University Press.

Bronson, M. A. (2016): "Degrees are forever: Marriage, educational investment, and lifecycle labor decisions of men and women," Unpublished manuscript.

Chiappori, P.-A., M. Iyigun, and Y. Weiss (2009): "Investment in schooling and the marriage market," American Economic Review, 99(5), 1689–1713.

Chiappori, P.-A., and M. Mazzocco (2017): "Static and intertemporal household decisions," Journal of Economic Literature, 55(3), 985–1045.

Corno, L., N. Hildebrandt, and A. Voena (2017): "Age of marriage, weather shocks, and the direction of marriage payments," Working paper 23604, National Bureau of Economic Research.

Dillon, B., and A. Voena (2018): "Widows' land rights and agricultural investment," Journal of Development Economics, 135, 449–460.

Doepke, M., and F. Kindermann (2016): "Bargaining over babies: Theory, evidence, and policy implications," Working paper 22072, National Bureau of Economic Research.

Duflo, E. (2001): "Schooling and labor market consequences of school construction in Indonesia: Evidence from an unusual policy experiment," American Economic Review, 91(4), 795–813.

Fernández, R., and J. C. Wong (2017): "Free to leave? a welfare analysis of divorce regimes," American Economic Journal: Macroeconomics, 9(3), 72–115.

Lise, J., and K. Yamada (forthcoming): "Household Sharing and Commitment: Evidence from Panel Data on Individual Expenditures and Time Use," Review of Economic Studies.

Low, H., C. Meghir, L. Pistaferri, and A. Voena (2018): "Marriage, Labor Supply and the Dynamics of the Social Safety Net," Working paper 24356, National Bureau of Economic Research.

Mazzocco, M. (2007): "Household intertemporal behaviour: A collective characterization and a test of commitment," The Review of Economic Studies, 74(3), 857–895.

Reynoso, A. (2018): "The impact of divorce laws on the equilibrium in the marriage market," Unpublished manuscript.

Rossi, P. (forthcoming): "Strategic Choices in Polygamous Households: Theory and Evidence from Senegal," Review of Economic Studies.

Tertilt, M. (2005): "Polygyny, fertility, and savings," Journal of Political Economy, 113(6), 1341–1371.

Voena, A. (2015): "Yours, mine, and ours: Do divorce laws affect the intertemporal behavior of married couples?," American Economic Review, 105(8), 2295–2332.