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

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

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

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

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?

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.

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

Bride Price/dowry Let q be the bride price that clears the

marriage market Two models a) Walrasian markets b) Frictional search market

Walrasian Market

r (sex ratio)

Bride price

ρ

-ρ

1

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

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*

Unique REE ratio is r*=1 Many possible bride prices in equilibrium One possible bride price is q* such thatU(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

Frictional market

r (sex ratio)

Bride price

ρ

-ρ

1

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

WelfareWelfare increasing in x at x*

Congestion externality still obtains(efficient ratio not necessarily 1)

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

Extensions Heterogeneity in wealth poor boys may be worst off in marriage

market imperfect foresight?

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.

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.