Point Estimates of Household Bargaining Power Using Outside Options

We demonstrate a new way to recover point estimates of bargaining power usinga collective model of the family with limited commitment. Estimating bargaining power forparents in each family requires that researchers first model each partner’s earnings oppor-tunities and predict their incomes in their relevant outside options. This strategy has sev-eral distinct advantages over other contemporary measurement options, such as not needingstrong assumptions on utility functional forms, distribution factors, or private assignablegoods. We use our method to generate point estimates of women’s power for a majority ofthe conjugal couples in the Progresa cash transfer experiment. We find that the mother inthe median family before the cash transfer had 25% of the decision making power that herpartner had, and 74% after treatment. We find that this empowerment caused a substantialimprovement in family diet at both the intensive and extensive margins.