Power When It Matters Most: Risk, Investment, and Insurance When Income Drives Bargaining Power

• Development Workshop

Date and Location

Tuesday, October 15, 2019, 4:10 PM - 5:30 PM
ARE Library Conference Room, 4101 Social Sciences and Humanities

Abstract

Economic shocks have disproportionate impacts on women and girls. Shocks increase mortality and malnutrition for girls but not for boys (Hoddinott and Kinsey 2000; Anttila-Hughes and Hsiang 2013), and reduce school graduation and increase poverty later in life for women and girls (Maccini and Yang 2009). This paper builds on the separate spheres model developed by Lundberg and Pollak (1993) to study how investment decisions, risk, and insurance affect household decisions. The theory I develop suggests that insurance has the potential to increase the bargaining power of women in the event of droughts, but only if it is linked to assets or expenditures within women’s traditional sphere within the household. I conduct a lab-in-the-field experiment in Sambury County, Kenya using a tablet-based insurance game and find that women buy significantly more insurance when it is linked to household expenditures.