From Household Allocations to Global Inequality: New Methods, Facts and Policy Implications

To understand and mitigate economic inequalities, both locally and globally, we need to acknowledge inequalities within households. Yet, in most empirical studies, such intra-household inequalities are disregarded mainly because we lack appropriate measurement tools and data. Not only is this problematic for inequality measurement, this lack of understanding hampers the design of cost-effective poverty reduction and child development policies. This project has five general objectives. First, I will update the facts about inequalities through direct measurement of intra-household consumption allocations, and relate these to spousal income contributions. Second, I will develop and validate novel measures of parental resource-allocation preferences and use these to study whether children are likely to benefit more if mothers, rather than fathers, receive cash transfers. Third, I will develop and validate novel measures of household decision-making and use these to investigate how targeted transfers shape women’s empowerment. Fourth, I will study whether cash transfers or an educational parenting program is most cost-efficient for child development. Fifth, I will use an integrated framework and the new tools and data, to refine our understanding of the mechanisms behind inequalities among adults and child development. Concretely, the project will contribute to our knowledge in the following specific ways. I will carry out an extensive data collection on intra-household allocations, parental-allocation preferences and women’s empowerment, in ten very diverse countries, one from each decile of the world income distribution. I will engage in a local RCT in Tanzania on cash transfers and parenting, which also involves extensive data collection on household consumption, time use, preferences and decision-making. Finally, I will conduct lab experiments in Chile, India and Tanzania so as to validate the parental-allocation preference and decision- making measures.