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Abstract
There is a longstanding interest in how decisions about resource allocations are
made within households and how those decisions affect the welfare of household
members. Much empirical work has approached the problem from the perspective that if
preferences differ, welfare outcomes will depend on the power of individuals within the
household to exert their own preferences. Measures of power are therefore a central
component of quantitative empirical approaches to understanding how differences in
preferences translate into different welfare outcomes. Following most of the empirical
studies in this genre, this paper focuses on dynamics within couples, although we
recognize that dynamics among extended family members and across generations are of
substantial interest.
A number of different measures of power have been used in the literature.
Because control over economic resources is seen as an important source of power,
individual labor income, which one earns and so presumably controls to some degree, is
one potential measure of power. However, whether and how much one works is a choice
that is not likely to be independent of one’s power in the household. Non-labor income
has also been used as a measure of power, but even if non-labor income does not reflect
contemporaneous choices, it likely does reflect past choices, particularly labor supply
choices, and so is also a function of power. Levels of resources brought to the marriage
by each spouse, over which they may individually retain control, are even less proximate
to the current choices of household members, but nevertheless reflect one’s taste in partners and therefore may not be exogenous to power. (In some instances, resources
brought to the marriage may reflect decisionmaking by the couple’s parents, depending
on the role that parents play in arranging marriages or transferring resources at the time
of marriage.)
A possible source of insight into the issue is to examine the impact of changes
that affect the distribution of power within the household but that are plausibly
exogenous to that power, such as changes in laws related to divorce or changes in benefit
programs that provide resources to one member of the couple but not the other. Economic
crises and the dislocations that accompany them may be another source of (exogenous)
change that provides an opportunity to examine whether changes in the distribution of
power within households is associated with changes in the welfare of individuals within
the household.
Another way to gain insight into intrahousehold decisionmaking is to develop
additional, more plausibly exogenous, measures of power. In the absence of conducting
natural experiments, it may be profitable to study variation in community norms or ethnic
traditions that give rise to different levels of power for different household members. This
approach has particular appeal for societies with heterogeneous cultures and those
undergoing dramatic social change. This approach would require combining insights
from the ethnographic and sociological literatures and from theoretical economic models
of behavior, as well as knowledge of survey design and field practice. This paper
describes an attempt to move in the direction of this ambitious agenda. Additionally, beyond the development of alternative or additional measures of power, it may also be useful to include in household surveys explicit questions to
multiple household members about decisionmaking within the household. This provides
insights into differences in perceptions among household members. Additionally, patterns
of decisionmaking may be outcomes (and thus indicators) of relative power within
households. Thus, indicators of decisionmaking shed light on how power manifests itself
in everyday life.
A goal of this project was to develop and field a decisionmaking module as part
of a large-scale, multipurpose household survey, the second Indonesia Family Life
Survey (IFLS2). The IFLS2 was fielded in 13 provinces in Indonesia between August,
1997, and February, 1998. From the point of view of working in heterogeneous and
dynamic societies, Indonesia is an ideal laboratory. The IFLS is an ongoing panel survey,
with the potential to provide a picture of the dynamics of power relationships over time
and across the life course, an issue about which little is known.
This paper describes the approach we took to developing the household
decisionmaking module and presents preliminary results from the IFLS2. We use the
IFLS2 data to address the following questions:
1) To what extent are day-to-day patterns of managing resources and making
decisions consistent with the notion that, within households, members either share
common preferences or the preferences of one member dominate? 2) Within households, who has the power over the purse strings? What
characteristics predict power over the purse strings?
3) How do husbands and wives make decisions about expenditures and about use of
time? Are there particular spheres where the man assumes control, and others
where the woman dominates? Are certain spheres of decisionmaking more
typically joint?
4) Can we identify indicators of relative power that can be collected in a field setting
and that can enrich our tests of models of household behavior? Can measures of
relative power used in other empirical studies be correlated with these indicators?