Gender Discrimination, Human Capital and Marriage

We show that the recognition of basic women's rights in developing countries may have important positive spillovers on the whole sphere of labor market transactions, with more women seeking education and an overall lesser wage discrimination against women. A combination of basic women's rights such as marriage consent, access to credit and the right to do business is shown to have important effects on the wage women can earn for their labor. Access to credit/entrepreneurship, in particular, raises the threat point of women in a spousal bargaining and has the interesting effect of making the transfer from husband to wife, otherwise decreasing with discrimination, a positive function of wage discrimination in the society. Our analysis suggests that where women empowerment has taken place, either from within or following women-targeted foreign aid, education for women should be on the rise and political support for a lessening of wage discrimination against women should be gaining ground.