Mother's bargaining power, gender preferences, and child schooling

A lot of theoretical and empirical research has been conducted to explain the influence of family demographics and resources on investment in human capital of children. One of the key theoretical developments in this area has been the formulation of the quantity-quality trade off model of fertility by Becker (1960) and others. The model is based on the premise that parents are inclined towards equalizing the quality among their children and explains the interdependence between the shadow prices of quantity and quality per child. Becker model, however, did not address how differences in parental preferences for gender mix of children and decision-making power in the family could influence the distribution of quality across children. While some of the studies find that mother’s power may have gender specific effects on the distribution of nutrition and schooling across children, the causes for such relationships are not well understood. In addition, none of the studies conducted so far provides conclusive evidence as to the causal mechanism that drives the relationship. In particular, the role played by the explicit parental preference for gender mix of children (combined with the parents’ bargaining power in the family) in shaping the distribution of human capital across children has not been investigated. This paper attempts to expand this literature.

This paper empirically investigates whether the quantity deficit in the children of the mother’s preferred gender is compensated through their favorable treatment in terms of investment in schooling (referred to as compensating hypothesis) and to what extent the mother uses her bargaining power in the family to influence this process. We use data from siblings in two rounds of the demographic and health surveys of Ethiopia for empirical analysis. Using the gender ratio of the mother’s own siblings and the birth of same sex twins as instruments for gender ratio gap, we estimate binary choice models with clustering using generalized instrumental variables techniques with interactive instruments. We find that the mother’s bargaining power working in the opposite direction to that implied by the compensating hypothesis in terms of influencing the chances of child schooling. Our findings make intuitive sense in the context of Basu’s (2006) hypothesis which implies that mother’s empowerment could turn out to be unfavorable to a child’s attendance of schooling in the circumstances where the child is needed to help out with family activities.