Alessandra Voena (Stanford University)

Traditional Institutions in Modern Times: Dowries as Pensions When Sons Migrate

Abstract: This paper uses novel data on the allocation of dowry to examine this important cultural institution’s role in resolving intrahousehold frictions between parents and sons in India, particularly regarding migration. We hypothesize that one cost of migration is the disruption of traditional elderly support structures, where sons live near their parents and care for them in their old age. Dowry can attenuate this cost by providing sons the ability to make up-front transfers that ease constraints on income sharing, enabling migration. To test this hypothesis, we collect two new datasets on property rights over dowry across family members. We document for the first time that net transfers of dowry to a man’s parents are common but far from universal. Consistent with using dowry for income sharing, transfers occur more when sons migrate, especially when they work in higher-earning occupations. Nationally representative data confirm that migration rates are higher in areas with stronger historical dowry traditions. Finally, exploiting a large-scale highway construction program, we show that men from areas with stronger dowry traditions have a greater migration response to reduced migration costs. Together, this evidence provides some clues as to why dowry may persist despite its well-documented adverse consequences.