The Role of Intrahousehold Bargaining in Gender Discrimination

Abstract

Two alternative intrahousehold resource allocation rules are considered and the role of intrahousehold bargaining in gender discrimination is explained. A model is constructed in which male and female agents interact at the household level in the form of marriage. It is shown that an asymmetric equilibrium in which male and female agents behave differently exists under either rule, but that welfare implications of the model depend critically on the nature of intrahousehold resource allocation. The asymmetric equilibrium is strictly welfare-reducing for female agents when total output is divided through Nash bargaining, but not when each household acts as one utility-maximizing unit. The model indicates that the nature of intrahousehold resource allocation has critical policy implications.