Labor Market Opportunities and Women’s Decision Making Power within Households

Despite the perceived importance of labor market opportunities in shaping married women’s outside option, and their bargaining power within households as a result, this link has received very little empirical attention. Using longitudinal data on who makes the decision on a wide range of issues within Mexican households and data from the administrative records of the Mexican Social Security Institute, this paper identifies the effects of relative changes in labor market opportunities for men and women on both working and non-working women’s relative decision making power. The implications for children’s health are also investigated. Using the differential effects of China’s admission to the WTO across Mexican industries, I check the robustness of my results. JEL-Code: D13, J13, J16, J23, O14 ∗Department of Economics, Lund University, Sweden. E-mail: [email protected] I am very grateful to Eduardo Gonzalez Pier and Judith Frias at IMSS for making available the Municipality level employment data. I would also like to thank Jason Abrevaya, Prashant Bharadwaj, Sandra Black, Nicholas Bloom, Leigh Linden, Emily Oster, Robert Pollak, Dani Rodrik, Steve Trejo, Thomas Wiseman, and participants at the NEUDC conference at Yale, the conference on Inequalities in Children’s Outcomes in Developing Countries at Oxford, and various seminars for comments and suggestions. All errors are mine.