REDS 99 contains information on nominal dowry payments made by parents at the time of the daughter’s marriage. The nominal dowry payments in the dataset are converted to real values using the Indian Consumer Price Index
(base: 1966 = 100).27
Table 7 presents results for log of real dowry payments at the time of
marriage. Focusing on column 4, we find that indeed mean dowry pay-
ments for women in the 11-15 group increases by 0.4 percentage points for the land-owning households compared to the non-landed ones in reforming states (equality of these two coefficients is rejected at the 5 percent level). Interestingly, the mean dowry payments of the 10 or younger group declines
27I use Consumer Price Index for Agricultural Workers as the deflator since the REDS
dataset focuses on a rural sample. I thank Robin Burgess for generously granting me access to his Indian states data for this purpose. Also, over 90 percent of the families in my sample pay dowry and receive nothing, hence I only focus on dowry payments.
by 0.36 percentage points. This could have two potential explanations: par- ents choose to compensate daughters only along one dimension, so since the 10 or younger group gains in terms of education in exchange of inheritance rights, they are paid less pre-mortem bequest. This explanation views educa- tion and dowry payments as competing channels of compensating daughters for disinheriting them from their rightful share in ancestral property. Al- ternatively, if dowry is interpreted as a price that clears marriage markets, then higher education could substitute for dowry payments as more educated brides enjoy higher valuation in the marriage market and hence has to pay lower dowries to secure the groom of their choice.
In column 5, I restrict the sample to include only those daughters whose fathers became the head of the household following the grandfather’s death, in order to maintain parity with the likelihood of inheritance results presented in Table 6. This reduces the sample size considerably, but he results are still very similar to those in column 4. Although the coefficient for the 11-15 group in landed households in reforming states is no longer significant at conventional levels, the coefficient is still similar in magnitude and sign to that in column 4. I can also reject the equality of this coefficient with that for the non-landed in reforming states at the 10 percent level. The coefficient for the 10 or younger group continues to be negative and highly significant.
However, the question remains as to why parents switch from dowry to education as a means of compensating daughters across cohorts? One po- tential explanation could be that although dowry is often interpreted as a pre-mortem bequest given to the daughter at the time of her marriage, it hardly remains under the control of the daughter after her marriage, and hence does not necessarily improve her welfare in reality (Suran, Amin, Huq, and Chowdhury, 2004). Education, on the contrary, is inalienable as an in-
vestment in the daughter and hence may be preferred by parents as a means of compensation when available. However, it cannot be ruled out that par- ents may be responding to a scenario of changing returns to female education in a growing Indian economy.
5
Conclusion
Human capital investment is widely considered to be one of the most impor- tant drivers of economic growth. This is especially relevant in the case of women as it is well-acknowledged that greater schooling of women enhances the human capital of the next generation and thus makes a unique contri- bution to economic growth (Behrman, Foster, Rosenzweig, and Vashishtha, 1999). This paper studies the impact of women’s property inheritance rights on their human capital attainment by exploiting exogenous variation gener- ated by state level amendments to the central inheritance law in India. I use a difference-in-differences approach that takes advantage of the fact that different states reformed the law at different points in time for identification. In particular, I compare educational outcomes of women who were of pri- mary school-going age at the time of reform (exposed or “treated” group) to those who were too old to go to school (“control” group), between reforming and non-reforming states. I find that being exposed to the reform was as- sociated with a significant improvement in the mean educational attainment of women. In order to improve identification, I also use a triple differences strategy to compare the difference-in-differences estimate by land ownership status of households, religious affiliation and gender. I find that the positive impact on education exists only for women (compared to men) and that too, only for those women belonging to landed (compared to non-landed) and
“Hindu” (compared to “non-Hindu”) households.
This paper also attempts to shed light on the underlying mechanism of this observed effect. I find that even though the reform entitled daughters to inherit equal shares in joint family property as sons, in reality, this did not happen. In other words, I find no impact of the reform on likelihood of inheritance by women. Instead, parents appear to be compensating their daughters for disinheritin them such by investing in their education as a form of alternative transfer of wealth. For those daughters who were already past school-going age at the time of the reform, the compensation takes the form of higher dowry at the time of their marriage.
Thus, the findings obtained in this paper have policy implications beyond the Indian context with regard to how socio-personal laws can affect economic outcomes. To the extent that inequality in opportunity for women can be traced to legal provisions, changes in inheritance legislation have the potential of addressing gender imbalances and influencing a wide range of outcomes for women, with economy-wide implications.
However, a relevant question to ask in this regard concerns the scalability of such amendments in order to ensure that the benefits can be reaped by
a bigger share of the population. Indeed, the amendment to the Hindu
Succession Act 1956 as described in this paper was extended to the whole of India in 2005, and it will be interesting to explore if the benefits enjoyed by the women in the first set of reforming states are subsequently shared by the rest of the country’s female population.