The distributive consequuences of machismo: A simulation analysis of intrahousehold allocation

Empirical evidence questions the unitary allocation model of the household that underpins the standard measurement of monetary poverty and inequality. Intra-household gender discrimination has been widely shown to shape expenditure decisions, nutrition status, and human capital accumulation of household members. However, conventional poverty and inequality analyses are conducted for the household as a whole, which might lead to different conclusions compared with studies based on individuals. Using recent developments in intrahousehold bargaining modelling, this paper constructs non-cooperative allocation rules dominated by gender discrimination among household members. Estimates for Chile show a substantial worsening of poverty and inequality under such allocation rules. This suggests that intra-household discrimination deserves some of the attention typically directed to extrahousehold discrimination in labour markets, access to public services or political participation.