A Suitable Groom: The Effect of Girl's Education on Dowry Payments

Abstract The social and economic costs of marriage for the bride represent a significant burden for low‐/middle‐income families, contributing to the disempowerment of women within their natal and marital households in multiple ways. This paper uses a large‐scale primary dataset from rural eastern India to investigate the association of dowry with women's education. We test two hypotheses: (a) the human capital effect, that is, the reduction in dowry because of an increase in the acquisition of human capital thereby improving her economic circumstances; (b) the hypergamy effect, that is, education can increase the incidence of dowry via the search for a potentially higher‐education attaining groom who will demand a higher dowry payment in the “marriage market.” Since the level of education of the women may itself be affected by dowry concerns and so is potentially endogenous, we use a state educational developmental policy as an intervention to understand the variegated impact of higher education attainment by women. Finally, the analysis shows an overall effect of the educational status of young women on the dowry payments made by their families, accounting for their distinction across two characteristics, higher human capital acquisition and greater potential to match a more educated groom in the marriage market.