However, if one assumes that spouses’ contributions are imperfect substitutes, then bargaining power will matter for consumption. This is the basic assumption of the “separate spheres” collective bargaining models, where the non-cooperative outcome serves as the threat point (Lundberg and Pollack, 1993; Chen and Woolley, 2001; Anderson and Eswaran, 2009). External changes that increase the wife’s utility under non-cooperation shift her threat point, leading to greater bargaining power under the collective outcome. However, the outcomes of the collective bargaining game are still Pareto efficient (Lundberg and Pollack, 1993). Thus, only the noncooperative separate spheres model captures both of Boserup’s hypotheses: 1) that bargaining power matters in the distribution of resources and, and 2) that household production can be inefficient, particularly in the provision of household public goods.

In this paper, we are interested in explicitly comparing gains from achieving women’s empowerment versus gains from moving from non-cooperation to cooperation. These gains operate through different channels, and the comparison highlights the conditions under which we would expect relatively large gains from empowerment versus cooperation. Our comparisons result from modeling four different scenarios based on a separate spheres model: 1) unequal bargaining power, non-cooperation; 2) equal bargaining power, non-cooperation; 3) unequal bargaining power, cooperation; and 4) equal bargaining power, cooperation. Whereas the first scenario leads to the worst set of outcomes in terms of women’s empowerment, the fourth scenario leads to the best outcomes. More interesting to consider are movements from the first scenario to the second and third scenarios, to determine the conditions under which the gains achieved by promoting empowerment are greater than gains from promoting cooperation within the household. For instance, our theoretical model demonstrates that improving women’s empowerment can have limited impacts on total household income and household public good provision if noncooperation within the household still prevails. Under other conditions, moving to cooperation will have limited impacts on household good provision, though total income will always increase.

Given the emphasis on women’s empowerment in the development discourse, it is useful to clearly capture the different impacts one would expect from increasing women’s bargaining power versus increasing intra-household cooperation. Thus, our first contribution to the literature is the development of a stylized model that captures these differences, and that characterizes the conditions under which we would expect greater gains from increasing bargaining power versus increasing intra-household cooperation. In reality, even though increasing women’s empowerment may increase intra-household cooperation, there may still be losses from not additionally focusing on gains from fostering cooperative decision-making within the household.

Our second contribution is to empirically test the model hypotheses using the sub-sample of rural households compromised of married couples that were interviewed in 2010 and 2013 by the Malawi Integrated Household Panel Survey (IHPS). The IHPS solicited information on whom in the household controls income from each source of income, allowing for both individual and joint 3