This dissertation comprises three self-contained chapters, in which I investigate the effect of demographic changes and policies on intra household allocations when the relative bargaining power is endogenously determined. In Chapter 2, I use a quantitative model to evaluate the effect of imbalanced sex ratios on female and male welfare in China. The imbalanced sex ratio affects the marriage market, which changes the relative bargaining power within the household, and hence individual labor supply and welfare. Chapter 3 further investigates the imbalanced sex ratio problem in China empirically and provides evidence in support of the arguments in Chapter 2. Chapter 4 studies the effect of a counter-factual income tax reform from joint taxation to individual taxation on married female labor supply, when the relative after-tax income directly affects the relative bargaining power. The tax reform will lower the marginal tax rate for the second earner (typically the wife), which increases her after-tax income and thus her bargaining power. With a higher bargaining power, she can substitute less leisure time for work. The result holds both theoretically and quantitatively.
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