The impact of a permanent Income shock on the situation of women in the household: the case of a pension reform in Argentina

Abstract: Transfers to women may a?ect their bargaining power within the household and consequently their well-being. We analyze the e?ects of the 2004/2005 pension reform in Argentina, that resulted in an unexpected and substantial increase in permanent income for around 1.8 million women, on outcomes arguably related to women’s bargaining power within the household. We estimate the e?ects of the reform in the probability of divorce/separation, the distribution of household chores, and the probability of women being the head of the household, using a Di?erence-in-Di?erences approach. Our results show that despite the low divorce probability among seniors, transfers to senior women have substantial e?ects on their situation in the household. More speci?cally, we ?nd that the reform had statistically signi?cant e?ects on the probability of divorce/separation increasing it by 1.8 ? 2.7 percentage points implying an increase of around 18 ? 19% on the divorce/separation rate of 60 ? 65 year old women. Moreover, the probability of being the head of the household also increased by 2.8?3.3 percentage points representing an increase of 7?19% in the probability amongst women of 60 ? 65 years of age. In the case of married women, the probability of being the head of the household increased by 1.3 ? 1.5 percentage points, which represents an increase of 20 ? 22%. Results show that the distribution of household chores within the couples was also a?ected by the reform. More precisely, the probability that the wife is the only person in charge of the housework decreased by 5 percentage points, an 11% decrease. The participation of husbands in housework, however, did not change signi?cantly.