Research on intrahousehold bargaining have shown that women’s ability to influence household allocation of resources hinges on the credibility of their threat options, which in turn, is determined by their earned and unearned income. It has also been shown in experimental settings that when women are economically empowered within their household, expenditure on children’s education and food increases, potentially contributing to intergenerational mobility. However, no prior studies have looked at how governments in low-income countries can use trade policy to encourage structural transformation in a way that promotes women’s empowerment. This project would provide evidence for whether trade policies adopted by low-income countries should seek to expand female-dominant industries to address household-level gender inequality, increase investment in children’s education, and tackle child poverty.
The US-Vietnam Bilateral Trade Agreement (BTA) was signed in July 2000 and came into force in December 2001. Under the BTA, Vietnam was given the status of Most Favoured Nation (MFN), having previously been treated as a Column 2 nation. This entailed a switch to a set of pre-existing MFN tariffs which were, importantly for the identification strategy of this paper, not a result of bilateral negotiations. Since neither nation were able to negotiate industry-specific tariffs, and since tariffs incurred by Vietnamese exporters were not dependent on pre-existing industry performance, the BTA can be leveraged as a natural experiment to study the effect of a low-income country’s access to foreign export markets on intrahousehold bargaining. The project makes use of the Vietnam Household Living Standards Survey (VHLSS), a nationally representative dataset that is primarily a repeated cross section, but also contains a panel component. This project uses the VHLSS conducted in 2001, representing households in the pre-BTA period, and the 2003 and 2005 surveys, representing households in the post-BTA period.
This project will be important for sub-Saharan African countries because across the region, employment within the agricultural sector fell by approximately 0.9 percentage points between 2007 and 2015, indicative of structural transformation. Despite this, research on intrahousehold bargaining in sub-Saharan Africa predominantly concerns how returns to crops grown by men and women affect each household member’s intrahousehold bargaining position. This leaves the question of how women’s exit from agriculture affect intrahousehold resource allocation unanswered, and this project would fill this gap in the literature. From a policy perspective, understanding the gendered labour market outcomes of trade is important not only to ensure that trade does not exacerbate gender disparities, the empowerment of women is also crucial for securing economic development (Duflo, 2012).