The effect of labour demand on women’s intra-household decision power: Evidence from Indonesia

This study contributes to the literature on household decisions and women’s empowerment by looking at the relationship between labour market opportunities and women’s intra-household decision power in Indonesia. Using Bartik labour demand measures, I estimate the effect of change in local labour demand for women in large and medium manufacturing on women’s intra-household decision power. Household decision power is calculated using direct information on who makes decisions in the household. I find that increase in labour demand for women in large and medium manufacturing increases women’s intra-household decision power by a large magnitude. Increase in labour demand for men decreases women’s household decision power. Consistent with intra-household bargaining theories, increase in labour demand for women increases women’s decision power even for women who do not work. Based on new literature discussing the validity of Bartik instruments, I discuss the validity of my identification strategy and conduct robustness tests.