Gender of children, education and occupational choice in Nepal CMI research program Magnus Hatlebakk

Son preference From DHS data we know that people get more children if the first-born is a girl The gender of the first born is thus a (random) natural experiment – We do not find extensive sex-selective abortions in Nepal (1.04 boys per girl, which is normal) – We measure the consequences of a first born girl on economic decisions – As the gender of the first born gives exogenous variation in the number of children we can estimate the consequences of many children on economic decisions

Gender of first born Number of children Dowry payments Economic decisions: - Female labor market participation - Education of children - Other investments - Occupations of children Caste Female empowerment

Empirical strategy Implications of a first-born girl – Number of children – Education of children – Mother’s labor market participation – Childrens’ occupations as adults Implications of many children – Education of children – Mother’s labor market participation – Childrens’ occupations as adults The first category of estimation is a black box, we do not know why gender affects the decisions

Empirical strategy-2 In the second category we need an underlying model where number of children is one of many economic decisions: – Optimal investment-occupation strategy (number of children, education, dowry, land, animals, physical capital) – Possible exogenous determinants: Gender of first-born Female empowerment Social identity (caste/ethnicity/religion) Land of parents

Data NLSS1 (1995), NLSS2 (2003), NLSS3 (2010) + a smaller (?) panel Main problem: No information on household members who have separated from the household – Can be minimized by focusing on young parents Only indirect information on dowry Only 8 years between the two rounds of the panel Solution: Tailor-made survey in Morang district

Policy implications Son preference may be rational for the family – Sons have better chances in the labor market – Girls are costly (dowry, they leave the family) So is there any reason for government intervention? – Additional children implies a cost for other households in aggregate (pressure on land, government services) – In case of heterogeneous intra-household preferences the society may side with the (less powerful) woman So family planning and programs for female empowerment are relevant policies