Template-Type: ReDIF-Paper 1.0
Title: Childbirth and Welfare Inequality: The Role of Bargaining Power and Intrahousehold Allocation
Author-Name:Naijia Guo
Author-Email: njguo@hku.hk
Author-Name: Anning Xie
Author-Email: anning.xie@uni-mannheim.de

Classification-JEL: D13,J13,J16



Keywords: Child Penalty, Bargaining Power, Intrahousehold Allocation, Gender Gap,Welfare

Abstract: This paper investigates the impact of childbirth on wives’ bargaining power and welfare
by analyzing labor market responses and adjustments in intrahousehold resource allocation.
Using data from the Japanese Panel Survey of Consumers (1993–2020) and employing
an event study approach, we find that wives, relative to their husbands, experience
a 38.59% decrease in private consumption and a 13.82% decrease in leisure right after
the birth of the first child. We develop a collective bargaining framework to estimate the
effects of parenthood on bargaining power, preferences for consumption and leisure, and
productivity in producing public goods for both spouses. Our analysis reveals that the
wife’s bargaining power declines by an average of 34.3% within the first eight years after
the first birth, while her preference for public goods increases more than her husband’s.
Additionally, the arrival of a child leads to a 12.2% decline in welfare for wives but a 7.0%
increase for husbands. Counterfactual analysis suggests that if wives’ bargaining power
had remained unchanged after childbirth, their welfare would have increased by 21% compared
to the baseline, and their welfare relative to their husbands’ would rise from 75% to
82%.

Note: 
Length: 79
Creation-Date: 2026-01
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp725
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_725