The determinants of bargaining power in an empirical model of transfers between adult children, parents, and in-laws for South Korea

John C. Ham, Heonjae Song

Research output: Contribution to journalArticle

Abstract

We derive a bargaining model of transfers between adult children and their parents, and then estimate the model using data from South Korea. Our analysis extends the literature on family bargaining by i) arguing that transfers from the couple represent semiprivate consumption (e.g. it is plausible that the wife cares more about her parents than about the husband's parents, and vice-versa) and ii) using results from laboratory experiments to help identify the model.We find that women have slightly more bargaining power than men in the couple's decision making. We also find that when an adult child receives an extra dollar of income, she transfers half of it to her parents; this result is consistent with previous work. Finally, we reject the null hypothesis that bargaining power within the family depends only on the potential wage of each spouse.

Original languageEnglish (US)
Pages (from-to)73-86
Number of pages14
JournalJournal of Development Economics
Volume109
DOIs
StatePublished - Jul 2014

Keywords

  • Bargaining
  • Family transfers
  • Korea
  • Marriage market
  • Maximum likelihood estimation
  • Old-age support

ASJC Scopus subject areas

  • Development
  • Economics and Econometrics

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