Does the Distribution of Bargaining Power Across Parents Affect Children’s Well-being? Experimental Evidence

Abstract

In this study, we investigate bargaining power under risk and uncertainty among 70 rural couples of Okara, Punjab, Pakistan. We use risk and uncertainty experiments conducted individually and jointly with spouses to estimate their bargaining power. Survey data has also been collected for comparison purposes and to estimate the impact of women’s bargaining power on child outcomes. The results reveal that in the context of rural Okara, it is the husband who has the higher bargaining power as compared to his wife and risk and ambiguity aversion has a high negative impact on the bargaining power of women. Our results reveal that as women bargaining power gets higher, child labor reduces, especially for daughters and child health improves specially for sons, but surprisingly, child schooling diminishes with the increase in women’s bargaining power for both sons and daughters. Also we found that self- reported data is not reliable enough because huge differences are found when same questions regarding HH decisions were asked separately from spouses.