As Figure 1 shows, _increases in female earnings_ can, on the one hand, reduce current poverty and stimulate short-term growth through higher consumption expenditures, and, on the other hand, reduce future poverty and stimulate long-term growth through higher savings.<sup>2</sup> To the extent that increased female earnings leads to higher bargaining power for the woman in the household, increased earnings has an indirect effect of promoting increased child well-being.

_Children’s wellbeing_ is another pathway through which increased gender equality may be associated with poverty reduction and growth (see Figure 1). As discussed below in Section 3, increases in maternal education and control over household resource allocation improve child wellbeing, educational attainment and health. This, in turn, leads to increases in children’s cognitive ability and productivity as adults (Hoddinott et al. 2005; Behrman and Alderman, 2006). Thus, increases in women’s influence over decisionmaking in the household leads to an intergenerational transmission of earnings capability and this, in turn, improves prospects for poverty reduction and growth in the future.

In the next section, we present and analyze the evidence linking increased female schooling and control over household resources to improvements in children’s health and schooling. We then turn to the issue of labor force participation, productivity and earnings; Sections 4-7 examine the determinants of women’s productivity and earnings by examining conditions in labor, credit, land and technology markets that affect women’s access to these markets and, consequently, their earnings and productivity.

# **3. Child wellbeing**

Measuring bargaining power within the household and the consequent ability to influence household decision making (including resource allocation) is a difficult endeavor. In the 1990s, most studies relied on data on individual earnings and asset ownership obtained from household surveys. Yet current earnings and asset ownership are clearly endogenous: they both affect and are affected by women’s bargaining power.

A second generation of studies attempted to deal with this endogeneity by using measures of the gaps in resources brought to marriage, which are arguably exogenous to decision-making after marriage.<sup>3</sup> More recently, studies have examined the effect on resource allocation of receiving

> 2 Note that this effect does not hinge on women having differential consumption and saving propensities than men: it simply refers to _levels_ of consumption and saving, which will both rise as female earnings rise.  As Floro and Seguino (2002) note, there are also several reasons why women and men may have different marginal propensities to save and consume. Relative to men, women might have a higher marginal propensity to consume out of current income in order to improve human development outcomes in the household.  On the other hand, if women have a stronger preference than men for mitigating the effects of negative income shocks, they might have a higher marginal propensity to save.  Since evidence for these propositions is not conclusive, Figure 1 does not incorporate any effects that hinge on differential marginal propensities to consume or save.

> 3 In a study examining trends in schooling, age, and assets at marriage for men and women in six countries (Ethiopia, South Africa, Mexico, Guatemala, the Philippines and Bangladesh), Quisumbing and Hallman (2003) find that, over time, husband-wife gaps in educational have decreased in three countries, remained unchanged in two, and increased only in Ethiopia.  In terms of assets brought to marriage, on the other hand, they find that the gap between men and women has increased in three of the countries and remained unchanged in the other three.<sup>3</sup> Regardless of

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