Fertility and endogenous gender bargaining power

We develop an intra-household bargaining model to examine the feedback effect of household fertility decisions on gender bargaining power. In our model, the household balance of power is endogenously determined reflecting social interactions, i.e., the fertility choices by the other couples in society. We show the presence of multiple equilibria in fertility outcome: one equilibrium characterized by patriarchal society with a high fertility rate, and another in which women are sufficiently empowered and the fertility rate is low. In other circumstances, this study also demonstrates a positive relationship between female wage rates and the fertility outcomes. Finally, we discuss its policy implications, comparing the effects of two family policies: the child allowance and the subsidies for market childcare.