Hyun H. Son

Nanak Kakwani

English

Research Papers in Economics

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United Nations Development Programme           April, 2006          Number   19
by Nanak Kakwani and Hyun H. Son
International Poverty Centre
Women’s earning power
and wellbeing
Most people belong to a household (or family). They share
happiness, sorrows and, more importantly, resources that are
generated by household members. The vast majority of economic
activities take place within households. A variety of decisions about
labor force participation, education, expenditures, saving, asset
accumulation, investments, marriage and fertility are made within
households. What goes on within households critically affects
growth, income distribution and poverty in a country.
Most economic analysis assumes that a household is a single decision
making unit in which all individuals have the same preferences.
Decisions within the household are assumed to be made in such
a way that every individual within the household enjoys the same
level of welfare. But here we are assuming too much.
Numerous studies show that there is systematic deprivation of
women vis-à-vis men in many societies (Dreze and Sen, 1989). The
very fact that there exits domestic violence against women in many
households indicates that unitary decision models are unrealistic.
It is widely known that the probability of survival in South Asia is
higher among male children than female children. This suggests
that households treat male children differently from female children
with regard to allocation of resources. In this respect, Sen’s story of
a large number of “missing women” in Asia and North Africa as a
result of gender bias in the distribution of health care, food and
other necessities is indeed very telling.
There is now an increasing focus on models of bargaining
relationships within households. The main idea behind these
models is that relative bargaining power of men and women
ultimately affects the distribution of consumption not only
between men and women but also between adults and children
and between boys and girls.
It has been found that as women’s contributions to household
monetary income increase, they are more able to influence how
household resources are allocated. The reason is that their greater
earning potential gives them greater bargaining power.
Women generally contribute to household welfare by means of
work that is unpaid, mostly performed at home. Their monetary
contribution to household income is generally lower than that of
men. This may be due to the fact that they have fewer opportunities
for getting outside work and paid employment. Cultural factors
indeed play an important role in the determination of who does
how much housework.
Women’s unpaid housework may be of critical importance in the
determination of household wellbeing, but unfortunately it does
not get as much recognition as paid work does. In order to get such
recognition, many recent studies are advocating an inclusion of the
imputed value of women’s unpaid work in the construction of national
accounts (see, for example, Levy Institute-UNDP, 2005). Even if women
were able to achieve official recognition of their work, still their
bargaining power within the household would likely be lower than
that of men if they are not able to make monetary contributions to
the joint resources of the household.
Women’s contribution to household prosperity from outside gainful
activities is the most important factor in the determination of their
relative and absolute deprivation. Research tends to confirm this
view. Our own research shows that in a middle income country, such
as Brazil, women’s contribution to household labor earning is less
than half of men’s despite the fact that women have more years of
schooling compared to men. Thus, schooling alone does not explain
the earnings disparity between the two. The other factors that play an
important role are labor force participation rate, employment rate,
labor productivity, hours of work and non-labor income. There are
disparities between men and women with regard to all these factors.
Although women have as much to offer at work as men do, they
generally are unable to play an active role in labor markets because
they face many constraints within as well as outside the household.
Some of these constraints could be eliminated by government’s
policies aiming to make the labor market less discriminatory. Such
policies could enhance overall wellbeing in society and would have
a more direct impact on enhancing women’s empowerment than
actions seeking recognition of unpaid work in official statistics.
References
Dreze, J. and Sen, A. (1989), Hunger and Public Action, Oxford: Clarendon Press.
Levy Institute-UNDP, Unpaid Work and the Economy, Conference Proceedings, 2005 <http://www.levy.
org/undp-levy-conference>.

Hunger and Public Action,

Women's earning power and wellbeing

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Women's earning power and wellbeing

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