Income Transfers, Intra-Household Resource Allocation and Marriage Markets in Rural Mexico

Gustavo J. Bobonis, University of California, Berkeley

This paper develops a test of the unitary intra-household resource allocation model using both rainfall variation and experimental evidence from a conditional cash transfer program to estimate changes in women’s income shares in rural Mexican households. The evidence rejects the theory that consensus prevails among husbands and wives in the resource allocation process. Expenditures shares in girls’ and boys’ clothing increased by 10% in households where women received cash transfers relative to a comparison group with equivalent income levels. Marital union dissolution rates among cash transfers recipients increased by a substantial 40% over a two-year period. Behavioral responses vary substantially across indigenous and non-indigenous populations. A review of both quantitative and qualitative evidence suggests that social norms and property rights that favor women in indigenous communities may help explain the observed differences.