Research

A large gap exists between the aspirations of Indian women and their actual rates of labor market participation. This paper studies how intra-household bargaining dynamics and expectations contribute to this gap and the resulting low female labor force participation (FLFP). I collect individual-level matched data from 2,200 spouses in Uttar Pradesh, measuring expected changes in household outcomes conditional on female labor market outcomes, together with individual preferences over these outcomes. A novel empirical fact emerges: husbands in single-income couples expect large utility costs from FLFP, driven by a substantial increase in women control over household resources and overall bargaining power. These expectations, however, are misaligned from those held by their wives and fellow men whose wife works for pay, which in turn match realized outcomes in their communities. I rationalize these findings through a collective household model with endogenous bargaining and no commitment. The model implies an inefficiently low level of FLFP, driven by the primary decision maker’s incentive to maintain their bargaining power. I validate these findings through a field experiment, finding 40% lower take-up of a real-world job offer when women have to negotiate participation with husbands holding more pessimistic beliefs.