Wealth, Marriage, and Sex Selection∗

Sex selection continues to be a serious problem in India, despite many decades of economic progress. It is widely believed that large marriage payments to the groom’s family or dowries are the main cause of sex selection in India, especially among the wealthy. Our theoretical model clarifies this argument, showing that the root cause of sex selection is not dowries but specific frictions in the marriage market, which arise because of the structure of the marriage institution. The model predicts that relatively wealthy households within castes, which define independent marriage markets in India, will be more likely to practice sex selection. This prediction is tested with unique data we have collected, covering the entire population of 1.1 million individuals residing in half a rural district in South India. We find that the variation in sex ratios within castes in this single district is comparable to the variation across all districts in the country. Given that the marriage market is organized the same way in all castes, sex selection may be a more pervasive problem than is currently believed. Estimation of the model’s structural parameters allows us to quantify the impact of alternative policies, which operate through the marriage market, to reduce sex selection. We find that cash transfers to adult women, which forwardlooking parents will take into account when making sex selection decisions, are substantially more effective than transfers to their parents when they are children.