Female Income and Family Welfare in India

National Bureau Of Economic Research, Cambridge MA

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Abstract

DESCRIPTION (provided by applicant): Income-generation and empowerment programs throughout the developing world seek to directly increase female income under the assumption that women will allocate more resources to family welfare. A large literature has attempted to identify the positive effect of increasing female income and power, but with mixed results. This project seeks to improve on past studies in two ways. First, by accounting for the endogeneity of male and female incomes. Second, by accounting for the effect of the underlying social structure, measured by the household's caste, on household decision-making. In particular, a norm-based model of household decision-making is considered that explains both the variation in household resource allocation across castes as well as the marital violence that has been associated with increasing female income in many traditional economies. The investigators have collected an extensive data set from 23 tea estates owned by a single company in Kerala, South India. Climatic variation across tea estates gives rise to exogenous variation in total household income as well as female income. At the same time, incomes do not vary by caste and all estates have identical social services. This unique natural experiment will be exploited to study the effect of exogenous variation in female income on major household decisions and outcomes, separately by caste, in a controlled environment. The main outcomes of interest include child health, education, and marriage, savings and retirement decisions, and marital conflict. Qualitative methods will also be used to study in depth the process by which norms of male decision-making are challenged in this traditional society.