Three essays on intrahousehold finance and development

This dissertation is a collection of three essays that investigate financial issues within households in a developing country context. Chapter 1, entitled "Are women from low-income urban households more likely to be credit constrained," tests whether women are more likely to be credit constrained compared to men in low-income urban communities in the Philippines. Results suggest that women are more likely to be credit constrained than men in this context. Instead of wealth, credit history appears to be a stronger predictor of the credit constraint status for both women and men. Providing more loans to poor women is likely to improve women's welfare by relaxing the credit constraint, although other interventions that assist the poor in managing risks, such as microsaving and microinsurance programs, are also likely to be effective. Chapter 2, entitled "A semi-cooperative model of household finance," presents an intrahousehold decision making model where cooperative and noncooperative behavior are not mutually exclusive. Individuals choose the optimal share of income they wish to devote towards cooperation, where income is pooled and allocated collectively, and towards noncooperation, where income is allocated independently. Using joint saving as an example, this model shows how limited autonomy and bargaining power can interact to create incentives for individuals to hide income, and provides theoretical support for collecting survey data from individuals rather than household representatives. Chapter 3, entitled "The determinants of savings pooling," examines the savings pooling decisions of individuals by estimating the determinants of individuals' share of savings in joint accounts. Results suggest that individuals are more likely to save jointly when women have stronger bargaining power, and are more likely to save individually when women have weaker bargaining power. The evidence also suggests significant gender differences in savings pooling behavior; women pool more savings when the dependency ratio is higher, while men pool less savings when household income is above the median. Removing institutional barriers to private saving can encourage saving among women with relatively weak bargaining power. This essay provides empirical support for the call to collect financial information at the individual, rather than the household level.