Intra Marriage Bargaining Power and Fertility Decisions for Women in Developing Countries

Younoh Kim, Eastern Michigan University
Vlad Radoias, Towson University

Two types of theoretical bargaining models can be employed to study issues on intra marriage bargaining - a competitive and a cooperative bargaining model. While many seem to support the idea that couples make their decisions together in trying to maximize household welfare, there is no general consensus on which type of model is more appropriate. One particular result suggesting that couples bargain competitively is the result that links fertility decisions to bargaining power-the women prefer less children than men, and bargaining power influences fertility. However, these studies are suffering from endogeneity issues that are not properly instrumented for. We propose instruments for bargaining power based on individual risk and time preferences which affect the threat point and bargaining power of spouses, but not the fertility decisions directly. Using this identification strategy, we show that fertility decisions do not depend on bargaining power, which supports the unitary bargaining model.