Female labour, status and decision power

This paper investigates the role of (perceived or own) norm cost in the relationship between female labour supply and decision power, which we define as the say that women have in major household decisions. We propose a model where female labour supply and decision power are set jointly following a bargaining process. Taking into account the fact that men may lose status when having a working wife, we show that decision power and female labour supply can be negatively correlated. We test the predictions of our model using Indian panel data. We find that the relationship is negative in contexts where the norm cost of having a working wife is high.