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Open Access Publications from the University of California

The Effect of Welfare Reform on Women's Marital Bargaining Power

  • Author(s): Bird, Mia
  • Advisor(s): Raphael, Steven
  • et al.

Marital bargaining models predict changes in the policy environment that affect the relative well-being of husbands and wives in divorce will indirectly affect the distribution of power within marriage. This study estimates the effect of 1996 welfare reform policies on the marital bargaining power of women with young children. Although the distribution of marital power cannot be directly observed, I utilize Consumer Expenditure data to infer shifts in bargaining power from changes in family demand. I first differentiate gendered patterns of consumption to create an indicator of relative bargaining power which I call the "male bias." I then use policy variation over time and across states to identify the effect of welfare reform on the marital bargaining power of low-income women with young children. I characterize states as either "intensive" and "non-intensive" reformers based on 12 dimensions of welfare reform implementation policy. Based on these characterizations, I use a triple-difference estimator to capture the differential change in bargaining power for women with young children in intensive reform states. I estimate a 20 percentage point increase in the male bias for poor women and an 8 percentage point increase in the male bias for low-income women over the period of welfare reform. These findings suggest welfare reform caused a substantial decline in the marital bargaining power of those women most likely to view welfare as a potential alternative to marriage. Given evidence from the literature connecting women's bargaining power with the share of family resources allocated toward children, these findings may have both equity and efficiency implications for further welfare policy reform.

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