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Multidimensional pre-marital investments with imperfect commitment

Author

Listed:
  • Bhaskar, Venkataraman
  • Li, Wenchao
  • Yi, Junjian

Abstract

We analyze a model of multidimensional parental investments under imperfect marital commitment. Parents choose to invest in their child's human capital and in housing, which is a public good within marriage. If men are in excess supply in the marriage market, but also enjoy greater bargaining power within marriage, their parents will overinvest in housing to credibly commit to share more resources with potential wives. This may crowd out human capital investment. To test the theory, we use nationally representative Chinese household survey data to examine the effect of a more male-biased local sex ratio upon investments in boys, relative to investments in girls.Parents with boys increase labor supply and migrate more to improve earnings and investments. They increase housing investment while reduce educational investments.

Suggested Citation

  • Bhaskar, Venkataraman & Li, Wenchao & Yi, Junjian, 2022. "Multidimensional pre-marital investments with imperfect commitment," CEPR Discussion Papers 16864, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16864
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    Keywords

    Premarital investment; Imperfect commitment; Sex-ratio imbalances; Public goods; Human capital investment; Human capital development;
    All these keywords.

    JEL classification:

    • 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
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D10 - Microeconomics - - Household Behavior - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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