Women's employment, intra-household bargaining, and distribution: a two-sector analysis

This paper investigates the intra-household impact of an expansion in employment opportunities for women in a dual labor market, when the informal sector functions as a gateway to the formal sector. We use a variant of the Harris-Todaro framework with two-period overlapping generations to model this economy. Labor allocation decisions and distribution of household consumption are determined according to the generalized Nash cooperative bargaining solution, and agents have perfect foresight. It is shown that an increase in demand for women's labor can shift intra-household distribution in favor of men and thereby reduce women's welfare.