Gender bias & parental choice

1. Gender bias & parental choice • Foetal sex determination + selective abortions • Sex ratio in census biased against girls • Jha et al (Lancet, 2006) -- survey of 1.1 million households in India • Difference in sex ratios of additional child depending on sex of previous children • Interpreted as evidence of selective abortion • “10 million missing female births” over 20 years

2. Elsewhere? • China – “40 million girls are missing” • Evidence of gender preferences in US • Probability of having 3rd child highest for parents with 2 girls • Lower for parents with 2 boys, lowest for 1B 1G

3. Dahl-Moretti • divorce rate higher if first child is a girl (fathers seem to prefer boys) • Shotgun marriage rate higher when first child is boy (ultrasound) • Prob. Of second child higher when first is girl • Survey evidence: fathers prefer boys

4. Gallup poll of 2129 adults, 2000 & 2003 • Suppose you could have only 1 child, what gender would you prefer? • Women: 35% G, 30% B • Men: 19% G, 48% B

5. How can this imbalance persist? • Market failure in the marriage market? • Parents failing to realize that future market conditions may be very different from today’s?

6. Is parental choice good? • Dharma Kumar (1983): given discrimination, parental choice can reduce gender bias by improving women’s position in marriage market • Contrary view -- sex determination & selective abortion illegal in India.

7. How should we think about welfare • If abortion is fine…what about selective abortions? • If foetus has no rights, then does not enter welfare calculation • Welfare in terms of parents and surviving children

8. Bride Price/dowry • Let q be the bride price that clears the marriage market • Two models • a) Walrasian markets • b) Frictional search market

9. Walrasian Market Bride price ρ 1 r (sex ratio) -ρ

10. Rational expectations equilibrium • Parents make decisions at t=0 • At t=1, marriage market operates • Bride price q – transfer from boy to girl

11. Rational expecations eq • Price & sex ratio (q*,r*) anticipated at t = 0 • Parents make choices to maximize payoffs • Payoff from boy is U(r*)-q* • Payoff from girl is V(r*)+q*

12. Unique REE ratio is r*=1 • Many possible bride prices in equilibrium • One possible bride price is q* such that U(1)-q*=V(1)-q* Parents indifferent between boys and girls at this price. Other bride prices also possible, where • U(1)-V(1)-2q* ≤ 2c and V(1)+2q*-U(1) ≤ 2c • Equilibrium is efficient

13. Bride price ρ 1 r (sex ratio) -ρ Frictional market

14. Marriage market with frictions • Price determined thru decentralized bargaining. • If r=1, q=0. • If r<1 but close to 1, q will be positive but small • (small imbalances have small price effects) • In equlibrium, r*<1 and q*>0

15. Welfare Welfare increasing in x at x* Congestion externality still obtains (efficient ratio not necessarily 1)

16. Policy • Ban on selective abortion: unworkable? • Incentives for having girls + tax on boys • Removing gender discrimination in workplace • Future social problems arising from sex ratio (externalities of other sorts) • Liberalizing of laws, e.g. on homosexuality

17. Extensions • Heterogeneity in wealth • poor boys may be worst off in marriage market • imperfect foresight?

18. Conclusion • In the absence of prices, parental choice reduces welfare due to congestion externality • With bride prices, the sex ratio will be balanced in REE if the marriage market is Walrasian • With prices and a frictional market, the sex ratio can be unbalanced, and inefficient. Congestion externality in marriage market.

19. Implications for UK and DCs • Allowing gender choice for family balancing reasons • May or may not result in aggregate imbalances • If no aggregate effects, then choice improves welfare • May be offset by aggregate effects • E.g. if parents with 1 girl more likely to select than those with 1 boy.