Family bargaining over parental leave: A collective household model with endogenous gender power

• Published date: 01 December 2023
• Author: Ryo Sakamoto
• Date: 01 December 2023
• DOI: http://doi.org/10.1111/1468-0106.12437

ORIGINAL ARTICLE

Family bargaining over parental leave:

A collective household model with

endogenous gender power

Ryo Sakamoto

Graduate School of Economics, Osaka

University, Osaka, Japan

Correspondence

Ryo Sakamoto, Graduate School of

Economics, Osaka University, 1-7

Machikaneyama, Toyonaka, Osaka

560-0043, Japan.

Email: r.sk2015.g@gmail.com

Funding information

JST SPRING, Grant/Award Number:

JPMJSP2138

Abstract

Although existing studies have suggested that men's

leave-taking positively affectschildren'sdevelopment

and their involvement in childcare and household

chores in the long run, the underlying mechanism

remains unclear. To shed light on this ambiguity, this

study develops a dynamic collective household model

and analyses household decisions on parental leave-

sharing between spouses, resource allocation, home

production, and labour supply. We demonstrate that

gender equality in bargaining positions within fami-

lies before leave-taking is crucial in explaining the

positive impacts of men's leave-taking. Specifically, if

women's intrahousehold bargaining power before

taking parental leave is sufficiently low, their hus-

bands are unlikely to take leave, and women's posi-

tions may deteriorate after leave. Consequently,

households may allocate fewer resources to children,

and men may not actively participate in childcare

and household chores. Our model suggests that

implementing parental leave policies for both gen-

ders may not be sufficient; simultaneous measures to

increase women's bargaining power are necessary to

encourage men to take parental leave and maximize

the policies' benefits.

Received: 25 July 2023 Accepted: 28 July 2023

DOI: 10.1111/1468-0106.12437

Pac Econ Rev. 2023;28:613–637. wileyonlinelibrary.com/journal/paer ©2023 John Wiley & Sons Australia, Ltd 613

1|INTRODUCTION

Many countries worldwide have introduced parental leave policies to help families balance

childcare and work. Recently, many Asian countries have also implemented generous systems,

leading to an increase in the number of people opting for them (Attané, 2016; Frejka

et al., 2010). In recent years, men have also been encouraged to take parental leave. Men's

leave-taking is essential for achieving gender equality because their uptake may reduce the bur-

den of childcare on women and increase their labour supply. Gender equality in labour force

participation is deeply associated with equality in the gender division of domestic chores and

childcare. Indeed, existing studies, including those by Nepomnyaschy and Waldfogel (2007),

Haas and Hwang (2008), Kotsadam and Finseraas (2011), Bünning (2015), Patnaik (2019), and

Tamm (2019), have reported that men's leave-taking is positively correlated with fathers' long-

term participation in household chores and childcare, and is also beneficial for children's devel-

opment. Further, Del Carmen Huerta et al. (2013) and Cools et al. (2015) found that paternity

leave improves children's cognitive skills and school performance. However, the mechanism

underlying the long-term effects of men's leave-taking on their involvement in childcare and

children's development remains unclear. A better understanding of how couples decide on

parental leave-sharing and why leave-taking is related to ex-post household behaviours can

enable better policy design.

This study analyses how couples bargain over leave-sharing and how this decision is

related to resource allocation, home production, and labour supply to unravel the mecha-

nism of the aforementioned long-term effects. Moreover, it clarifies the association between

household behaviour and intrahousehold bargaining power. To this end, we developed a

dynamic collective household model with the following features. First, as suggested by

Mincer and Polachek (1974) and Corcoran and Duncan (1979), wages increase with work

experience. In other words, taking an extended leave reduces one's wages, as demonstrated

by Ruhm (1998), Albrecht et al. (1999), Rege and Solli (2013), and Cools and Strøm (2016).

As one of the trade-offs in taking leave and caring for children is the inability to work in the

labour market and gain work experience, incorporating career penalty into the model is cru-

cial. Second, the intrahousehold bargaining position hinges on the relative wages between

spouses (Baudin et al., 2015;Cherchyeetal.,2012;delaCroix&VanderDonckt,2010;

Gobbi et al., 2018; Pollak, 2005;Voena,2015). Third, the preferences across gender are het-

erogeneous. Specifically, women prefer to allocate more resources to children than men do,

as suggested by several previous studies (Attanasio & Lechene, 2002; Case & Deaton, 1998;

Lundberg et al., 1997;Pitt&Khandker,1998;Prettner&Strulik,2017). Finally, our model

is dynamic; the couple first bargains over leave-sharing, and then decides on resource allo-

cation, home production and labour supply. The combination of these assumptions allows

for a relationship between parental leave decisions and resource allocation, home produc-

tion and labour supply via intrahousehold bargaining power.

This theory yields the following main results. Intrahousehold bargaining power prior to

leave-taking has significant effects on leave-sharing and resource allocation. The lower an indi-

vidual's bargaining power, the more likely they are to take leave. This implies that they then

experience larger career penalties, which weaken their bargaining position within the family,

leading to resource allocation in favour of their partner. We impose heterogeneity of prefer-

ences between genders, implying that the household will allocate fewer resources to children if

women have reduced bargaining power before and after parental leave. Additionally, consistent

with the empirical evidence, men who take leave are likely to be involved in home production

614 SAKAMOTO