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

This paper examines whether an important cultural institution in India – dowry– can enable male migration by increasing liquidity at the time of marriage. We hypothesize that one cost of migration is the disruption of traditional elderly support structures, where sons co-reside with parents and care for them in their old age. Dowry can attenuate this cost by providing sons and parents with a liquid transfer that eases constraints on income sharing. To test this, we collect two novel datasets on property rights over dowry among migrants and among families of migrants. Net transfers of dowry to a man’s parents are common. Consistent with using dowry for income sharing, transfers occur more when sons migrate, especially when they work in higher-earning occupations. Nationally representative data confirms 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 higher migration response to a reduction in migration costs. Despite its potential negative consequences, dowry may play a role in facilitating migration and therefore, economic development.