Are better-off households more unequal or less unequal?

Abstract

In many parts of the world, resources within a household are apparently not distributed according to need. Using a model of intrahousehold bargaining, this paper first tries to answer the question: As households become better off, does intrahousehold inequality increase or decrease? It finds that under certain conditions intrahousehold inequality first increases and then decreases. The debate on intrahousehold inequality is entwined with policy questions about the efficacy of targeting individual disadvantaged members of a household, as opposed to poor households in general. The paper found that anintrahousehold bargaining view tends to support targeting to disadvantaged members of the household, because of bargaining power effects. The bargaining framework also gives support for the concern that some observers have expressed about the impact of structural adjustment on intra-household inequality. When cash crops are predominantly under male control and food crops are primarily a female preserve, improving the relative price of cash crops can worsen intrahousehold inequality.