Gender Bias in India: Parental Preferences or Marriage Costs?

This paper presents an analysis of gender effects in intra-household allocation of resources among children over the life-cycle in India. We present a simple three-period model that considers two possible motives for differential allocation of resources: parental preferences (in favour of male children) or higher marriage costs of female children. If parents incur high marriage costs for female children, then in a life-cycle context the birth of a female child will have the same effect as a negative wealth-shock, leading to a reduction in current consumption to meet future expenditures. We show that the predictions under these two regimes depend on whether we look at total expenditures or expenditures on adult goods. Estimation results based on a unique panel of data from India show that wealth-effect dominates parental preferences in intra-household allocation of resources for the wealthy households in our sample. We find that the reverse holds for the unpropertied households. Our savings estimates match with the expenditures that the wealthy households incur for a daughter's marriage.