To tackle the problems of poor families – whether in the developed or developing world – it
is not enough to decide how much assistance to give to the household but to whom within
the household it should be given.
As Professor Kaushik Basu points out in the April 2006 Economic Journal, when giving
financial or other support to a household, enormous differences can occur, especially from
the point of view of children’s well-being, depending on whether the money is given to the
mother or the father.
We know, for example, that when child support in the UK was switched from payments to
fathers to payments to mothers, household spending on children’s clothing went up.
Similarly, we know that a lot of poverty resides within families: girl children can be poorer
than boys; and mothers can be more malnourished than fathers.
What’s more, some of the decisions that a household takes can alter the balance of power
within the household. If a husband-dominated household takes the decision to send the
wife to work, then this in itself can result in the end of husband-domination. Hence, the
decision to bring the wife back from work may no longer belong to the husband, even
though he had taken the decision to send her to work.
This kind of ratcheting effect can lead households to behave in a less than ideal way, often
with women participating in the labour force less than would be best from the point of view
of the women and their families.
Professor Basu’s research sheds light on when women will seek work. He shows that there
may be many different outcomes for female labour supply. The fact that some households
send their women to work and others do not may reflect not a fundamental difference
between households and deep-rooted cultural priors, but merely the fact that different
households can get caught in different ‘equilibria’.
Hence, to increase the labour market participation of women, we may not need
fundamental changes in preferences and culture but some short-term economic policies,
such as bolstering female wage rates, to deflect the economy from one equilibrium to
another.
The study also looks at the relationship between a household’s power structure and the
incidence of child labour. It shows that as the woman’s power increases, child labour will
tend to decline.
But if power grows to a point of asymmetry in favour of the woman, then child labour will
rise once again. Hence, a household with power evenly balanced between the husband
and the wife is the one least likely to send its children to work.
Professor Basu comments:
‘The importance of the balance of power between husbands and wives makes it
impossible to view the household as a single unit, where all that matters is the
family’s aggregate income and not who brings in the bucks. This recognition opens
the way for novel ways of crafting policy for poverty reduction.’
ENDS
Notes for editors: ‘Gender and Say: A Model of Household Behaviour with Endogenously
Determined Balance of Power’ by Kaushik Basu is published in the April 2006 issue of the
Economic Journal.
Basu is C. Marks Professor of International Studies and Professor of Economics and
Director, Program on Comparative Economic Development at Cornell University
(Department of Economics, Ithaca, NY 14853; http://people.cornell.edu/pages/kb40/).
For further information: contact Kaushik Basu on +1-607-255-2525 (email:
kb40@cornell.edu) or Romesh Vaitilingam on 0117-983-9770 or 07768-661095 (email:
romesh@compuserve.com).