Strategic Parental Investments in a Competitive Marriage Market

61 Pages Posted: 15 May 2024

See all articles by Venkataraman Bhaskar

Venkataraman Bhaskar

University of Texas at Austin

Wenchao Li

Tongji University

Junjian Yi

Peking University

Abstract

Marriage market competition, coupled with imperfect commitment to intra-household resource sharing, may distort parental investments composition. When sex ratio is male-biased, parents of boys will overinvest in housing, potentially crowding out human capital investment. We examine the effect of more male-biased local sex ratio upon investments in boys relative to girls, using nationally representative Chinese data and a novel instrument to overcome the usual difficulty that sex ratios are related to unobserved son preference. Parents with boys increase labor supply and migrate to improve investments. They strategically respond to the sex ratio imbalance, increasing housing investment while reducing educational investment.

Keywords: Premarital investments, Sex ratio imbalance, Housing investment, Educational investment, Human capital development

Suggested Citation

Bhaskar, Venkataraman and Li, Wenchao and Yi, Junjian, Strategic Parental Investments in a Competitive Marriage Market. Available at SSRN: https://ssrn.com/abstract=4828699 or http://dx.doi.org/10.2139/ssrn.4828699

Venkataraman Bhaskar

University of Texas at Austin ( email )

2317 Speedway
Austin, TX Texas 78712
United States

Wenchao Li (Contact Author)

Tongji University ( email )

1239 Siping Road
Shanghai, 200092
China

Junjian Yi

Peking University ( email )

National School of Development
Peking University
Beijing, Beijing 100871
China

HOME PAGE: http://https://en.nsd.pku.edu.cn/faculty/fulltime/y/520194.htm

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