In this study we use data from rural India to examine the impact of the birth of a boy relative to the birth of a girl (i.e., the “gender shock”) on the savings, consumption and income of rural Indian households. We find that the gender shock reduces savings for medium and large farm households, although there is no evidence that the shock affects savings for the landless and the small farm households. We also estimate the effect of the shock on income and consumption for the former group in order to determine the source of the drop in savings. The results indicate that the fall in savings subsequent to the gender shock arises from its effect on consumption in the year following the birth, and from its effect on income in other years.
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