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Strategic parental investments in a competitive marriage market

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  • Bhaskar, V.
  • Li, Wenchao
  • Yi, Junjian

Abstract

We examine the effect of a more male-biased local sex ratio on the difference between parental investments in boys and in girls in China. Relative to parents with a first-born girl, parents of a first-born boy increase labor supply and migration as the male bias in the local sex ratio rises, and they change their investment composition: they increase housing investment while reducing educational investment. These findings provide support for a theoretical model of premarital investments, where men who are in excess supply on the marriage market, are unable to commit to sharing future labor income at the time of marriage, making housing a more credible commitment device. We also discuss alternative explanations that may align with the empirical evidence. Our empirical strategy employs a novel instrument for the local sex ratio.

Suggested Citation

  • Bhaskar, V. & Li, Wenchao & Yi, Junjian, 2025. "Strategic parental investments in a competitive marriage market," European Economic Review, Elsevier, vol. 173(C).
    • Handle: RePEc:eee:eecrev:v:173:y:2025:i:c:s001429212500008x
    DOI: 10.1016/j.euroecorev.2025.104958
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    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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