Women's Liberation as a Financial Innovation

77 Pages Posted: 7 Jul 2016

See all articles by Moshe Hazan

Moshe Hazan

Tel Aviv University - Eitan Berglas School of Economics; Centre for Economic Policy Research (CEPR)

David Weiss

Tel Aviv University - Eitan Berglas School of Economics

Hosny Zoabi

New Economic School (NES)

Multiple version iconThere are 2 versions of this paper

Date Written: July 2016

Abstract

Property rights are at the heart of capitalism's ability to efficiently allocate resources. Historically, married women have been one of the groups with the greatest legal disabilities in this regard, to the benefit of their husbands. Starting in the second half of the 19th century, common law countries, which were entirely dominated by men, gave married women property rights. Before this "women's liberation," married women were subject to the laws of coverture. Coverture had detailed laws as to which spouse had ownership and control over various aspects of property both before and after marriage. These laws created a strong disincentive for women to invest in financial assets, such as stocks, bonds, and even bank deposits. This paper develops a general equilibrium model with endogenous determination of women's rights in which these laws affect portfolio choices, leading to inefficient allocations. We show how technological advancement eventually leads to men granting rights, and in turn how these rights affect development. Exploiting cross-state variation in the timing of rights, we show that increases in non-agricultural TFP predict the granting of rights. The granting of rights in turn leads to a dynamic labor reallocation towards the non-agricultural sector, representing further development. Finally, we show that women's rights are associated with lower interest rates and greater financial intermediation, consistent with an increase in the supply of credit.

Keywords: Economic Growth, financial innovation, investor protection, political economy

JEL Classification: E02, E44, G11, J12, K11, K36, N11, N21, O11

Suggested Citation

Hazan, Moshe and Weiss, David and Zoabi, Hosny, Women's Liberation as a Financial Innovation (July 2016). CEPR Discussion Paper No. DP11371. Available at SSRN: https://ssrn.com/abstract=2804549

Moshe Hazan (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel

HOME PAGE: http://moshehazan.weebly.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

David Weiss

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel

Hosny Zoabi

New Economic School (NES) ( email )

100A Novaya Street
Moscow, Skolkovo 143026
Russia

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