Moral hazard in marriage: the use of domestic labor as an incentive device
Review of Economics of the Household, 2017, vol. 15, issue 2, 357-382
Abstract This paper argues that some women in developing countries use domestic labor as a tool to incentivize husbands. A theoretical model is derived based on the traditions of rural Malawi, where men often supplement farm income with wage labor. As wage labor is not observed by the wife, this creates moral hazard: husbands may not make enough effort to bring home wages. The model predicts that women overcome this by using domestic labor as an incentive device: they increase their domestic labor and reduce their leisure in response to good consumption outcomes, but only if they cannot rely on divorce threat as an alternative source of incentives. This prediction is confirmed using survey data from Malawi. Identification is based on the fact that Malawi’s kinship traditions exogenously determine women’s accessibility to divorce. Where divorce is not an option, women make inefficient labor choices in order to provide incentives.
Keywords: Moral hazard; Divorce; Domestic labor; Matrilineal (search for similar items in EconPapers)
JEL-codes: D13 D82 J12 J22 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s11150-016-9347-8 Abstract (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:reveho:v:15:y:2017:i:2:d:10.1007_s11150-016-9347-8
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11150/PS2
Access Statistics for this article
Review of Economics of the Household is currently edited by Shoshana Grossbard
More articles in Review of Economics of the Household from Springer
Bibliographic data for series maintained by Sonal Shukla ().