Women's Inheritance Rights and Wages in India: Measuring Impact Through Unobservable Human Capital Improvements

ABSTRACT This study examined the impact of the state‐level inheritance rights reforms in India, which granted women the right to inherit joint family property, on the years of education and real wages of female wage earners. The reforms targeted Hindus, Sikhs, Jains, and Buddhists. Data from seven rounds of the Employment and Unemployment Survey (1983–2011/2012) from the Indian National Sample Survey were analyzed using difference‐in‐differences (DID). The treatment group comprised women who lived in the four reformed states (Andhra Pradesh, Tamil Nadu, Karnataka, and Maharashtra) and were young at the time of the reforms. Our findings demonstrate that within the subsample of female regular workers, the increase in years of education for the women exposed to the reforms was not statistically significant. Nevertheless, this group experienced a wage increase of around 15% after controlling for their education levels. This increase may be attributed to improvements in the quality of human capital that are not directly observable in the data. Placebo regression with a sample of other religious groups (Muslims and Christians) and DID with propensity score matching confirmed the robustness of our results. Nevertheless, the impact of the reform on the casual wage laborer remains ambiguous.