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Substitution Effects in Parental Investments

Author

Listed:
  • Brandt, Loren

    (University of Toronto)

  • Siow, Aloysius

    (University of Toronto)

  • Wang, Jackie

    (University of Toronto)

Abstract

The paper estimates how parents adjust bride-prices and land divisions to compensate their sons for differences in their schooling investments in rural China. The main estimate implies that when a son receives one yuan less in schooling investment than his brother, he will obtain 0.7 yuan more in observable marital and post-marital transfers as partial compensation. Controlling for unobserved household heterogeneity, planned consumption differences across sons, and a fuller accounting of lifetime transfers are quantitatively important. The empirical findings strongly support the unitary model as a model of resource allocation for sons in traditional agricultural families.

Suggested Citation

  • Brandt, Loren & Siow, Aloysius & Wang, Jackie, 2009. "Substitution Effects in Parental Investments," IZA Discussion Papers 4431, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4431
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    File URL: https://docs.iza.org/dp4431.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    marriage market; parental investment; household model; transfers;
    All these keywords.

    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

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