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«Son preference in Indian Families: Absolute Versus relative Wealth Effects* Sylvestre Gaudin Oberlin College Sylvestre Gaudin Oberlin College, Dept. ...»

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Accepted Version, 10/2009

Please refer only to the edited 2011 Demography copyrighted version for quotes.

Son preference in Indian Families: Absolute Versus relative Wealth Effects*

Sylvestre Gaudin

Oberlin College

Sylvestre Gaudin

Oberlin College, Dept. of Economics

10, North Professor St.

Oberlin, Ohio 44074

Email: sylvestre.gaudin@oberlin.edu/slygaudin@yahoo.com

Tel: 440-775-8483 / 301-547-5095

Fax: 440-775-6978

* Initial work for this paper was done while the author was visiting research associate with the University of Maryland, AREC, and research affiliate with the World Bank, Washington D.C. In addition to her host institutions, the author thanks Jayati Datta-Mitra and Gautam Datta for substantial comments. Acknowledgements also go to David Bishai, Barbara Craig, Hirschel Kasper, Kala Krishna, Imran Lalani, Yana Rogers, and Abdo Yazbeck. This revised version owes a great deal to comments of three anonymous referees. All analyses and remaining errors are the author’s responsibility.

1

ABSTRACT

The desire for male children is prevalent in India, where son preference has been shown to affect fertility behavior and intrahousehold allocation of resources. Economic theory predicts less gender discrimination in wealthier households, but demographers and sociologists have argued that wealth can exacerbate bias in the Indian context. I argue that these apparently conflicting theories can be reconciled and simultaneously tested if one considers that they are based on two different notions of wealth: one related to resource constraints (absolute wealth), and the other to notions of local status (relative wealth). Using cross-sectional data from the 1998–1999 and 2005–2006 National Family and Health Surveys, I construct measures of absolute and relative wealth by using principal components analysis. A series of statistical models of son preference is estimated by using multilevel methods. Results consistently show that higher absolute wealth is strongly associated with lower son preference, and the effect is 20%–40% stronger when the household’s community-specific wealth score is included in the regression. Coefficients on relative wealth are positive and significant although lower in magnitude. Results are robust to using different samples, alternative groupings of households in local areas, different estimation methods, and alternative dependent variables.

Keywords: Gender, India, Multilevel Model, Relative Wealth, Son preference 2

INTRODUCTION

To “promote gender equality and empower women” is one of the eight Millennium Development Goals that 191 UN countries pledged to meet by 2015. Gender equality is seen as both a development goal and a necessary condition for sustainable development. Economists tend to think of economic development and gender equity as reinforcing: reduced gender discrimination facilitates income growth and higher incomes move societies toward less gender bias. While many have convincingly argued and empirically shown the negative impact of gender discrimination on economic development (e.g. Klasen 1999; Scanlan 2004; Sen 1984; Sweetman 2002; World Bank 2001), the other side of the causality, i.e. the role of income growth in altering gender biases, has received little attention. Recent evidence indicates that gender bias — measured using juvenile sex ratios and mortality — is generalizing and intensifying in India (Agnihotri 2003; Basu 1999, 2000; Murthi, Guio, and Dreze 1995; Premi 2001; Rajan, Shudha, and Mohanachandran 2000). Taking son preference as a barometer of girl neglect in India, a recent publication of the International Center for Research on Women using data from the first wave of the National Family and Health Survey (NFHS-1) concluded that “wealth and economic development do not reduce son preference” (Pande and Malhotra 2006). In light of these facts, it is important to reconsider the linkages between wealth and anti-female biases.

Different theories drawn from the economics, sociology, demography, and anthropology literatures provide conflicting predictions about the impact of increased wealth on gender bias in India. This paper does not add to these theories but argues and empirically shows that they rely on different notions of wealth: theories predicting less bias consider absolute notions of wealth based on resource constraints; those predicting more bias consider relative notions of wealth based on local status. Using a single measure of wealth in multivariate analyses of gender bias could capture either or both effects. If the effects are indeed opposite, omitting relative wealth would cause to underestimate the effect of absolute wealth.

To test this hypothesis, a series of nested multivariate models of son preference are estimated using cross-sectional data from the 1998-1999 and 2005-2006 NFHS. The dependant variable, son preference, is measured using survey responses on “ideal” family composition.

Two objections can be raised about this choice of variable to capture gender bias: one is that answers are biased by rationalization (for example a mother may declare preferring more sons 3 because she has more sons); the other is that son preference does not measure actual manifestations of gender bias.1 The first issue of rationalization can be treated using appropriate controls (as in Bhat and Zavier 2003, later referenced as B&Z, and Pande and Astone 2007, later referenced as P&A). The second objection is valid in the sense that stated son preference will never be perfectly correlated with manifestation of bias in any specific area; son-preferring households may still treat their daughters as well as their sons, and girl-preferring households may still be biased against girls when it comes to education and health. However, measures of revealed bias in one area are also problematic when generalizing to overall bias; for example, finding gender bias in education does not imply bias in health decisions. Stated son preference, on the other hand, can serve as a good barometer of trends in gender bias in all areas: girls in son-preferring households, ceteris paribus, are at greater risk of discrimination than girls in neutral or girl-preferring households. B&Z show that the summary statistics on stated son preference from NFHS-1 and NFHS-2 are consistent with sex ratios by state from the 1990 Indian Census.





Using dependant variables based on the same NFHS questions, neither B&Z nor P&A find strong support for a negative relationship between individual wealth and son preference.

P&A construct a measure of wealth using Principal Components Analysis (PCA) on a wide array of assets as is done here for absolute wealth; they find no significant positive or negative effect of wealth on son preference in NFHS-1. B&Z use NFHS-1 and NFHS-2 data and a coarser measure of standards of living; they find “[…] weak support for the possibility that the preference for sons will decline with the increase in wealth and rising wage employment of women” (Bhat and Zavier 2003: 649). Here, I construct two different measures of wealth using PCA: the absolute wealth score is obtained using the full India sample while relative wealth is calculated using a sample of households living nearby. Both variables are included in a multivariate model of son preference inspired by B&Z. I use multilevel statistical methods to take account of the hierarchical structure of the model and complex survey design. Consistent with economic theory, I find that higher standards of living at the household and macroeconomic levels are associated, ceteris paribus, with lower son preference. Incorporating relative wealth into the model reinforces the negative relationship between absolute wealth and son preference, 1 A related issue is that “pure” son preference, i.e, wanting a son based on personal taste rather than a response to structural motivating factors, will be confounded in the measure. Statistically, however, such preference should cancel out with girl-preference, on average.

4 increasing elasticities by 20 to 40% in magnitude, depending on the estimation method and sample. Higher relative wealth is significantly associated with lower son preference although the effect applies primarily to landed households. To test whether results generalize to gender bias beyond son preference, a similar model is estimated using stated educational preferences for boys and girls as the dependant variable. The same pattern is revealed, although the role of land ownership is no longer prevalent. Results are checked using alternative estimation methods with alternative definitions of son preference as well as an alternative delineation of local areas for relative wealth calculations. Details of these analyses are given in supplements available online on the Demography website.2 In all cases, qualitative results support the main hypothesis.

THEORETICAL FOUNDATIONS

There is no consensus across disciplines about the impact of increased wealth on gender bias in India. Economists generally predict a decrease in gender bias with increased wealth, at least after a certain level of development, whereas sociologists and anthropologists predict an increase in gender bias with increased wealth, based on features of Indian society. In this section, I review the arguments on both sides, separating out those based on changes in resource constraints from those related to one’s economic position relative to others.

Theories Based on Absolute Notions of Wealth

Economic models of resource allocation within the family (including fertility choices) generally consider some type of maximization of expected returns from having and raising male/female children given a budget constraint. Increases in wealth are represented by outward shifts of the budget constraint. The shifts represent increases in the quantity of resources available relative to a previous state, not relative to other households. The budget constraint may shift out due to pure income effects –family resources increase while relative expected returns from boys and girls do not change– or from both income and substitution effects –e.g. when expected net benefits from sons increase less rapidly than expected net benefits from daughters, an evolution that would be expected with economic development if wage gaps narrow. Larger budget sets may reduce bias 2 In the remainder of the article, I will make frequent reference to five online supplements available on the Demography Website (http://www.springerlink.com/content/x24126468214t642/supplementals/.) I will simply refer to them as “Supplement 1-5”.

5 through several direct or indirect interrelated channels: reduced competition for resources within the household, a narrowing of real gender-based wage gaps, and reduced fertility. Theories range from intra-household allocation decisions motivated by utility maximization and/or bargaining, to representative-agent macroeconomic growth models.

In Rosenzweig and Schultz (1982), the household chooses investment expenditures on boys and girls to maximize expected utility. Anticipations of higher returns motivate a larger share of expenditures on male children. If having a child is itself an investment, this could also explain son preference. Since the inequality is generated through budget constraints, relaxation of the constraint should reduce bias. Galor and Weil (1996) model the relationship between gender gaps, fertility, and growth in an overlapping-generations model. As the stock of capital grows, women’s relative wages increase (they assume that capital is more complementary to women’s labor than to men’s) so the opportunity cost of having children increases, lowering fertility. Lower fertility in turn increases the amount of capital per worker, resulting in higher relative wages for female workers. Their argument implies that women participate in the labor force, or at least that the increase in the wage of women relative to men provides greater incentives to do so. Such participation in the labor force creates positive feedbacks toward wage equality. The model does not address son preference but it is clear that the difference in expected lifetime earnings between boys and girls would decrease as the wage gap narrows, and this should in turn contribute to reducing son preference. Similarly, higher expected earnings would motivate greater educational investments in girls (Behrman et al. 1999, Kingdon 2005). Zhang, Zhang, and Li (1999) propose an endogenous growth model in which parent’s expectation of support for old-age perpetuates culturally and religiously induced son preference because greater support is expected from children who can accumulate greater human capital. Son preference is an argument of the parent’s utility function as well as a result of differential expected returns. If old-age support comes only from sons, bias continues with growth but if both children can accumulate human capital and girls can provide old age support, gender bias decreases with growth. Taking the argument further and assuming growth promotes better functioning capital markets, old age support would become less of a concern in wealthier households who would have less reason to be son-preferring.



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