California Center for Population Research

While theoretical models of family and household decision-making that highlight the role of the individual provide sharp empirical predictions, testing lags far behind. This paper provides a robust assessment of how shifts in the within-household balance of "decision power" affect family-level behavioral choices regarding labor supply and investments in the human capital of children. Using an exogenous source of variation provided by the adoption of a law (extension of alimony rights to cohabitants), this paper provides empirical evidence that (intra-household) empowerment of women resulted in the reduction of hours worked by female heads, and in the redistribution of household resources towards schooling of first-born girls. The results reveal heterogeneous characteristics of the parental preferences that are not compatible with the "unitary" representations of the household.