Covariate Shocks, Women’s Bargaining Power, and Household Vulnerability

Abstract

Can increased women’s relative bargaining power within households improve household-level resilience to large scale covariate shocks? Evidence from a recent pandemic suggests that enabling women to access market-linked-value-chains significantly increases their relative bargaining power within households. In this paper we estimate the extent to which a given stock of market-enabled-relative bargaining power of women influenced the resilience of rural households to the covariate shock. We utilize a unique data-generating process that combines data from two rounds of household surveys with the data from a laboratory experiment that was conducted with both the spouses in rural dairy households. Evidence from the shift-share instrumental variable approach shows that a unit improvement in women’s bargaining power led to a 3.82 per cent reduction in the vulnerability of households to food poverty during the pandemic. The paper also models the role of food and nutrition decisions as pathways to reducing household vulnerability to food poverty during the shock. JEL Codes: C36; I38