The Fertility-Sex Ratio Tradeoff: Unintended Consequences of Financial Incentives
AbstractLower fertility can translate into a more male-biased sex ratio if son preference is persistent and technology for sex-selection is easily accessible. This paper investigates whether financial incentives can overcome this trade-off in the context of an Indian scheme, Devirupak, that seeks to decrease both fertility and the sex ratio at birth. First, I construct a model where the effects of incentives are determined by the strength of son preference, the cost of children, and the cost of sex-selection, relative to the size of incentives. Second, I create a woman-year panel dataset from retrospective birth histories and use variation in the composition of pre-existing children as well as the state and the year of program implementation to estimate its causal effect. Devirupak successfully lowers the number of children by 0.9 percent, but mainly through a 1.9 percent decrease in the number of daughters. Faced with a choice between a son and only daughters, couples choose a son despite lower monetary benefits, and thus the sex ratio at birth unintentionally increases. A subsidy worth 10 months of average household consumption expenditure is insufficient to induce parents to give up sons entirely. Instead, Devirupak increases the proportion of one-boy couples by 5 percent. Only the most financially disadvantaged groups exhibit an increase in the proportion of one-girl couples.
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Bibliographic InfoPaper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 827.
Date of creation: 15 Jul 2013
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Demographics; fertility; sex ratio; financial incentives; childbearing;
Other versions of this item:
- Anukriti, S, 2014. "The Fertility-Sex Ratio Trade-off: Unintended Consequences of Financial Incentives," IZA Discussion Papers 8044, Institute for the Study of Labor (IZA).
- D1 - Microeconomics - - Household Behavior
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
- I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
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