Pierre André Chiappori (Columbia) "Family Economics" - Cemmap

8. Sharing the gains from marriage 369
technology, such as the legalization of abortion, generally increases the welfare
of all women, including those who want a child and are not interested
in the new technology. Note, however, that the mechanism generating this
gain is largely indirect. The reason why even married women willing to have
a child benefit from the birth control technology is that the latter, by raising
the reservation utility of single women, raises the ‘price’ of all women
on the matching market (although this logic fails to apply in situations of
‘large’ excess supply of women).
An interesting, although somewhat paradoxical implication is that reserving
the new technology to married women (as was initially the case
for the pill, at least for younger women) would actually reverse the empowerment
effect. The option of marriage to women with a low taste for
children, who are willing to accept a lower compensation from the husband
for getting married and gaining access to the new technology, toughens the
competition for husbands. Therefore, women of the high or intermediate
type are made worse off by the introduction of the new technology. Only
women with a very low taste parameter (that is, below the lower marginal
value) gain from the innovation. This comparison emphasizes the complex
and partly paradoxical welfare impact of a new technology. On the one
hand, its effects can go well beyond the individuals who actually use it,
or even consider using it. Our model suggests that a major effect of legalizing
abortion may have been a shift in the intrahousehold balance of
powers and in the resulting allocation of resources, even (and perhaps especially)
in couples who were not considering abortion as an option. On the
other hand, the new technology benefits all married women only because
it is available to singles. A technological improvement which is reserved
to married women will have an impact on their fertility, partly because it
changes the mechanisms governing selection into marriage. But its impact
on women’s welfare is largely negative, except for a small fraction of women
who choose marriage as an access to the new technology.
8.3 Matching with general utilities
We now switch to the general framework in which we relax the assumption
that utility is transferable. The tractability of the transferable utility
framework comes at a cost. The most obvious drawback is that under TU,
couples behave as singles; in particular, their demand function (that is,
the amount spent on each of the public or private commodities) does not
depend on the Pareto weights. In other words, changes in male and female
income distributions may trigger a reallocation of resources (or more
precisely of one commodity) between spouses, but under TU, it cannot
have income effects, and cannot result in, say, more being spent on children
health or education. While this framework may be useful in many