Legal status, gendered preferences, and intra-household allocations: evidence from a restrictive household registration system

This paper uses China's household registration system, hukou, to study how legal statuses and gendered preferences shape intra-household allocations. The hukou system determines access to public services, including such aspects as which schools children can attend, and signals the strength of local social networks. Notably, this access often depends on the household head's status. So, couples may report the wife as the household head if she has better hukou. Moreover, an individual can often acquire their spouse's hukou status. Therefore, better hukou may increase an individual's bargaining power within a couple through either of these pathways. This unique context lets us explore how external policies and societal factors related to social status impact household decision-making. We begin by showing that hukou status affects an individual's contribution to household well-being. We then show reduced-form evidence that if the wife has better hukou, household consumption shifts towards goods that prior studies suggest are favored by wives. Armed with this suggestive evidence, we estimate a collective model of household consumption. We allow bargaining power to depend on the spouses' hukou statuses. We show that hukou status significantly influences bargaining power within families. Wives with more advantageous hukou display considerably more bargaining power than other wives, although still less than their husbands. We find notable differences in preferences between husbands and wives, particularly for goods linked to gender roles, such as alcohol, tobacco, and clothing.