Endogenous Gender Power and Economic Development

U of Colorado, Economics Working Paper No. 02-3

45 Pages Posted: 23 Feb 2002

See all articles by Murat Iyigun

Murat Iyigun

University of Colorado at Boulder - Department of Economics; Harvard University - Center for International Development (CID); IZA Institute of Labor Economics

Date Written: March 2002

Abstract

This paper presents an economic growth model where life expectancy is determined endogenously and "collective" bargaining between the wife and the husband forms the basis of household decisions. Since child rearing is more time costly for women, they prefer fewer but more educated offspring. When life expectancy is relatively low, the rate of return to the education of women is significantly lower than that of men due to the amount of time allocated to child rearing and the effcetive labor supply. With endogenous bargaining power based on effective wage incomes, this generates an equilibrium where household behavior is characterized by greater emphasis on quantity. When women are not expected to work, parents do not invest in the education of their daughters and higher life expectancy widens the education gap between men and women. This strengthens husbands' marital power and the emphasis on quantity. As life expectancy continues to rise, however, the relative return to the education of women increases and families start to invest in the education of their daughters. This in turn lowers the education gap and raises women's intra-household bargaining power, which leads to lower fertility, higher average education, and more rapid economic growth. In addition to yielding historically consistent patterns of demographic change and economic development, this approach reveals the following: (a) Marriage as an "institution" is related to economic development, where the extent to which wives' choices are reflected in household decisions affects growth; (b) Changes in life expectancy alter the role of marital choices in growth via the impact of life expectancy on intra-household bargaining power; and (c) The extent to which an economy is culturally predisposed towards gender equality is important.

Keywords: Fertility, Education, Gender Power, Demographic Transition, Growth.

JEL Classification: J13, O11, O33, O40

Suggested Citation

Iyigun, Murat F., Endogenous Gender Power and Economic Development (March 2002). U of Colorado, Economics Working Paper No. 02-3, Available at SSRN: https://ssrn.com/abstract=301212 or http://dx.doi.org/10.2139/ssrn.301212

Murat F. Iyigun (Contact Author)

University of Colorado at Boulder - Department of Economics ( email )

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Boulder, CO 80309
United States
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Harvard University - Center for International Development (CID) ( email )

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IZA Institute of Labor Economics

P.O. Box 7240
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