I propose a model of household decision-making under asymmetric information and show that resulting allocations may not be fully cooperative. The model yields a simple test for cooperative decision-making, which I apply to data from China. I find that, when the father migrates without his family, children spend more time in household production, while mothers spend less time in both household production and income-generating activities. This is not consistent with standard cooperative models of the household: simply reallocating time to compensate for the father’s absence would cause an increase in household labor for both children and mothers and, if migration occurs in response to a negative shock, we should observe an increase in mothers’ time in income-generating activities rather than a reduction. The results also do not appear to be driven by an increase in mothers bargaining power, as children’s human capital is not affected by migration, controlling for income.
Journal of Development Economics, 100(1), 1-18, January 2013