Choice or bargain? Married women's labor force participation in Honduras

The stylized fact that married women's labor force participation is half that of other women, even among a poor population like that of Honduras, is described by many researchers as the result of comparative advantage in the household. However, the high probability of household dissolution and women's burden of responsibility for children when separated would suggest that married women would prefer to work during marriage to maintain their bargaining power in the household and the market. Because this does not occur, the author argues that the intrahousehold resource allocation of labor is subject to patriarchal power relations in the household and unequal outside options which limit women's individual choice in labor allocation. The author develops a dynamic non-cooperative bargaining model of the household to explain the inefficient equilibrium outcome of married women's complete specialization in household production, assuming endogenous outside options and strategic renegotiation. Empirical estimations of married women's labor force participation using the probit maximum likelihood method are applied to a case study data set of Chamelecon, San Pedro Sula, Honduras. The estimations include previously omitted variables that represent outside options and power in the household. The estimation that includes the power variable of husband's disapproval of wife's work has the greatest predictive power of labor force participation. Nonetheless, these results are tempered by measurement error in the variable. Both the theoretical and empirical work tentatively conclude that the labor force participation of married women in non-cooperative households is negatively affected by the exercise of husband's power.