Impact of Industrialization on Relative Female Survival: Evidence from Trade Policies
DIW Berlin, Germany
Previous attempts at understanding the role of industrialization on son preference are confounded by the endogeneity of the industrialization process. This paper exploits an exogenous shift in the trade policy in India to study the impact of industrialization on son preference. Using a difference-in-differences strategy, I find that households are more likely to have a male child in regions with higher trade openness relative to regions with lower degrees of trade liberalization. Moreover, trade openness seems to have intensified son preference for Hindus but not for Muslim households. I further analyze the underlying mechanisms through which industrialization might have affected son preference. I find no significant evidence to suggest that household income or a change in female labor market opportunity is affecting relative female survival following trade liberalization. On the other hand, I find a significant increase in real dowry payments in regions experiencing greater trade openness. Most interestingl, dowry inflation is concentrated in the Hindu households, but not in the Muslim households. The results are robust to falsification tests using cohorts born much before the liberalization period and are not driven by systematic migration into areas with greater trade openness.
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