Household Bargaining and Spending on Children: Experimental Evidence from Tanzania

Abstract

This paper studies whether an increase in women's intrahousehold bargaining power causes couples to allocate more resources to their child's education, and, if so, what the underlying mechanisms for this might be. We conduct a between‐subject lab experiment with couples and vary the relative bargaining power between spouses. The paper provides two main insights. First, increasing the wife's bargaining power improves gender equality in allocation to children's education. However, it does not increase the amount invested in the child's education. Second, we show that the difference in time preferences between spouses matters for how much the household invests in the child's education. It benefits the child that the most patient spouse has more relative bargaining power. This implies that increasing the wife's bargaining power may reduce the allocation to the child's education if she is the less patient spouse. The results provide new insights into the current debate on female empowerment, and highlight the importance of incorporating a broader set of preferences in the analysis of intrahousehold decision‐making.