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

Introduction

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, but this lack of understanding hampers the design of cost-effective poverty reduction and child development policies.

Project Objectives

This project has five general objectives:

1. Update Inequality Facts
   I will update the facts about inequalities through direct measurement of intra-household consumption allocations and relate these to spousal income contributions.

2. Develop Parental Resource-Allocation Measures
   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.

3. Investigate Household Decision-Making
   I will develop and validate novel measures of household decision-making and use these to investigate how targeted transfers shape women’s empowerment.

4. Evaluate Cost-Efficiency for Child Development
   I will study whether cash transfers or an educational parenting program is most cost-efficient for child development.

5. Refine Understanding of Inequalities
   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.

Contribution to Knowledge

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 to validate the parental-allocation preference and decision-making measures.