Bride Prices, Land Division, and Education in Rural China: Substitution Effects in Parental Investments -

Loren Brandt (University of Toronto) discusses the investment decisions parents make regarding their children.

October 29, 2009
4 -5:30 PM
Presentation in the USC Department of Economics Development Economics series

Parents have to decide how much to invest and the types of investment to make in each of
their children. Loren Brandt and his coauthors estimates how parents adjust bride-prices and land divisions to compensate their sons for differences in their schooling investments in rural China. The main estimate implies that when a son receives one yuan less in schooling investment than his brother, he will obtain 0.7 yuan more in observable marital and post-marital transfers as partial compensation. Controlling for unobserved household heterogeneity, planned consumption differences across sons, and a fuller accounting of lifetime transfers are quantitatively important. The empirical findings strongly support the unitary model as a model of resource allocation for sons in traditional agricultural families.

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Loren Brandt is a Professor of Economics at the University of Toronto specializing in the Chinese economy. He has been at the University of Toronto since 1987, and was previously at the Hoover Institution at Stanford University. He has published widely on the Chinese economy, both historical and contemporary, in leading economic journals, and has been involved in extensive household and enterprise survey work in both China and Vietnam. He was co-editor and major contributor to China’s Great Economic Transformation (Cambridge University Press, 2008), a landmark study that provides an integrated analysis of China’s unexpected economic boom of the past three decades. Brandt was also one of the area editors for Oxford University Press’ five-volume Encyclopedia of Economic History (2003). His current research focuses on issues of industrial upgrading in China, inequality dynamics, and economic growth and structural change.