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.