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How does intergenerational investment respond to changes in the marriage market? Evidence from China

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  • Han, Li
  • Shi, Xinzheng

Abstract

This paper examines how intergenerational investment responds to changes in the marriage market. Two major channels are modeled and empirically tested: first, expecting gender-specific impacts on the future marriage market for their children, parents' adjustments in educational investment differ by the gender of children, and second, changes in marriage market conditions have contemporaneous impacts on intrahousehold bargaining because they change existing couples' remarriage options, which affects their educational investment in their children. We test our model by exploiting a policy change in favor of local urban men in the urban marriage market in China. We find that educational investment by local-local couples decreases for sons but changes little for daughters. Consistent with the decrease in children's educational investment, female-favored consumption decreases while male-favored consumption increases. These results provide evidence of interaction between the intrahousehold bargaining and the future marriage prospect effects.

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  • Han, Li & Shi, Xinzheng, 2019. "How does intergenerational investment respond to changes in the marriage market? Evidence from China," Journal of Development Economics, Elsevier, vol. 139(C), pages 109-121.
    • Handle: RePEc:eee:deveco:v:139:y:2019:i:c:p:109-121
    DOI: 10.1016/j.jdeveco.2019.03.002
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    Cited by:

    1. Dong, Xiaoqi & Liang, Yinhe & Zhang, Jiawei, 2023. "Fertility responses to the relaxation of migration restrictions: Evidence from the Hukou reform in China," China Economic Review, Elsevier, vol. 81(C).
    2. Li Han & Xinzheng Shi & Ming-ang Zhang, 2022. "How Does Matching Uncertainty Affect Marital Surplus? Theory and Evidence from China," HKUST CEP Working Papers Series 202202, HKUST Center for Economic Policy.
    3. Chen, Liwen & Chung, Bobby W. & Wang, Guanghua, 2023. "Exposure to socially influential peer parents: Evidence from cadre parents in China," China Economic Review, Elsevier, vol. 78(C).
    4. Wanru Xiong, 2022. "Dynamics between Regional Sex Ratios at Birth and Sex Ratios at Prime Marriageable Ages in China," Population and Development Review, The Population Council, Inc., vol. 48(2), pages 545-578, June.
    5. Qinyou Hu, 2024. "Social status and marriage markets: Evaluating a Hukou policy in China," Review of Economics of the Household, Springer, vol. 22(2), pages 477-509, June.

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