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Women's Empowerment: Aggregate Effects on Savings and Wealth

Luis San Vicente Portes, Vidya Atal and Miriam Juarez

No 2019-21, Working Papers from Banco de México

Abstract: This article explores the aggregate effects of women's empowerment on intra- and intertemporal household choices within a Bewley-style heterogeneous agent framework to aggregate household level decisions into macroeconomic variables. Emphasis is placed on the role of attitudes towards risk and subsistence consumption. In this context, we find that as women get more empowered, we assume that households show a higher risk aversion reflecting the more risk adverse women's preferences. Thus, households heighten self-insurance by increasing precautionary savings for smoothing consumption and, in turn, this higher level of savings tends to reduce wealth inequality. Also, regardless of income, women's preferences increase food intake in households as women get empowered. The model is calibrated with the 2014 National Survey of Household Income and Expenditures of Mexico.

Keywords: Women empowerment; wealth; savings; subsistence consumption (search for similar items in EconPapers)
JEL-codes: O11 E21 D70 (search for similar items in EconPapers)
Date: 2019-12
New Economics Papers: this item is included in nep-mac
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