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Keynes Fund


Summary of Project Results

Economic development in South India has been particularly rapid in recent decades. We would expect improvement in other social indicators, including gender equality, to accompany this development.

However, gender bias in favor of boys appears to be intensifying, and through practices such as female foeticide, infanticide, and neglect, has led to worsening child sex ratios. At the same time, girls’ higher-secondary school enrollment has reached parity with boys and recently surpassed it in the state of Tamil Nadu, where the proposed research will be conducted. The “Gender Paradox” we have uncovered is likely to emerge in the future in transition economies with similar structures, with the same adverse distributional consequences.

Our explanation for the Gender Paradox is rooted in a market imperfection: the mispricing of the marriage-price or dowry. As in much of the world, marriage in South India is patrilocal (the bride moves to live with the groom’s family) and is typically arranged by the parents. The transfer (dowry) from the father to his daughter must thus be routed through an intermediary – her father-in-law – who can keep part of it for himself. This market friction is the source of the mispricing, which results in a gender-gap (girls are less valuable than boys) and, in the extreme case, in sex selection. Our theory indicates that the market imperfection can actually be exacerbated with economic development. We show that fathers could invest more in girls’ education than boys’ education as a substitute for the inefficient dowry transfer-mechanism, even as the gender-gap grows and sex ratios worsen.

Our interdisciplinary research team will test the theory by leveraging an ongoing project in rural Tamil Nadu that is funded by the U.S. National Institutes of Health. Support from the Keynes Fund is sought to incorporate additional modules on marriage, education, and health into a survey of 9,000 representative households in the study area that is scheduled to commence in summer 2014. Information on parental inputs and child outcomes, by gender, will also be collected at a higher level of specificity than has previously been attempted in developing countries. Although there is an existing literature on marriage and dowry in economics, this is the first attempt we are aware of to link imperfections in the marriage market to gender inequality. Our work will thus advance the research frontier in economics, while at the same time adding a fresh area of investigation to the Keynes Fund portfolio.



Professor Kaivan Munshi


Professor Kaivan Munshi is Professor of Economics at the Department of Economics, Yale University. His research interests are in Development Economics.


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