Does investing in women really help children?

I’m attending Growth Week at LSE, where there are more papers worth blogging than blog time available.

Empirical evidence suggests that money in the hands of mothers (as opposed to their husbands) benefits children. Does this observation imply that targeting transfers on women is good development policy? We develop a series of non-cooperative family bargaining models to understand what kind of frictions can give rise to the observed empirical relationships…

One key question is why women invest more in children, rather than buying alcohol or tobacco as men seem prone to do…

If the underlying differences are biological in nature, giving more power to women should always benefit children. If, on the other hand, at least some of the behavioral differences are themselves due to gender discrimination [i the wage labor market], promoting gender equality would result in women becoming more like men, potentially lowering the benefits for children.

…we show that a gender wage gap can lead women to specialize in home production and therefore act like they have a higher weight on children relative to their husbands. We also also show that gender differences in investment opportunities can lead women to act like they value children relatively more.

The paper, by Matthias Doepke Michele Tertilt, is a good example where microeconomic theory can help us understand the potentially unexpected effects of popular programs.

Another nice point they make: if men have more “investment” opportunities than women, giving money to women might lower household income in the longer run and come at the expense of child welfare.

Their main point: we don’t have the answer one way or the other. We have jumped to the conclusion that investing in women is better for children from looking at a few cases of the very poor, and if we understand the mechanism better, we’ll understand which policies will work best, for whom, and how long.

For the record, my money is on deep social and possibly biological differences, implying we ought to give the money to women. But that is idle speculation.