Multidimensional pre-marital investments with imperfect commitment

Venkataraman Bhaskar, Wenchao Li and Junjian Yi

No 16864, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Premarital investment; Imperfect commitment; Sex-ratio imbalances; Public goods; Human capital investment; Human capital development (search for similar items in EconPapers)
JEL-codes: D10 J12 J13 J16 J18 J24 J61 O15 (search for similar items in EconPapers)
Date: 2022-01
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Journal Article: Multidimensional Premarital Investments with Imperfect Commitment (2023)
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