Hukou and Guanxi: How Social Discrimination and Networks Impact Intrahousehold Allocations in China

Hukou, China’s household registration system, affects access to public services and signals the strength of a person’s local social network, guanxi. We use a collective model and data on household consumption and spouses’ hukou status to show that hukou plays a crucial role in determining within-family bargaining power. Wives who bring the family more lucrative hukou enjoy significantly higher bargaining power than other wives. Still, these wives have less bargaining power than their husbands. Large differences in preferences between husbands and wives, especially regarding alcohol, tobacco, and clothing, allow us to identify these disparities.