Missing Women and the Price of Tea in China: The Effect of Sex-Specific Earnings on Sex Imbalance

Economists long have argued that the severe sex imbalance that exists in many developing countries is caused by underlying economic conditions. This paper uses plausibly exogenous increases in sex-specific agricultural income caused by post-Mao reforms in China to estimate the effects of total income and sex-specific income on sex ratios of surviving children. The results show that increasing income alone has no effect on sex ratios. In contrast, increasing female income, holding male income constant, increases survival rates for girls; increasing male income, holding female income constant, decreases survival rates for girls. Moreover, increasing the mother's income increases educational attainment for all children, while increasing the father's income decreases educational attainment for girls and has no effect on boys' educational attainment.