Property Division upon Divorce and Household Decisions

ABSTRACT

Before 2011, Chinese married couples expected equal division of housing property upon divorce, even when the home was titled only under the husband’s name and bought by the husband before marriage. In 2011, a Supreme Court decision led to enforcement of a title-based regime, only for housing property purchased before marriage and brought into the marriage by one of the spouses. We investigate the effects of this legal change using a difference-in-differences design. We find that this legal change weakened wives’ intrahousehold bargaining power, leading to reductions in their leisure, increased consumption of male-favored goods, and reduced investment in children.