(2) alters our estimates. Since payments by the groom are much smaller than those by the bride, we do not expect this to matter. Table A.15 confirms our intuition. The coefficient of _Firstborn girl * Expected gross payment by bride_ continues to be positive and significant, and similar in magnitude to the coefficient of _Firstborn girl * Expected net dowry_ in Table 3.

## **7.4 Dropping one state at a time**

We also test the sensitivity of our savings and father’s labor supply results to the inclusion of any one particular state by re-estimating specifications (2) and (3) while dropping one state at a time. The coefficients for the main interaction terms are reported in Table A.16. It is reassuring that the magnitude of the coefficients remains similar to our previous estimates. Moreover, out of 34 regressions, we lose significance only in three cases.

## **7.5 Placebo tests**

Lastly, to further ensure that our expected dowry variable is not capturing the effect of other variables, we construct alternative average measures at the Caste x State x Year level for six other variables: total household expenditure, per capita household expenditure, father’s years of education, mother’s years of education, acres of land owned by the household, and per capita acres of land owned by the household, and then run placebo regressions by replacing the expected dowry variable in our specification (1) and (2) with these measures. In all cases, the coefficient of the interaction term in Table A.17 is insignificant. This lends support to our argument that our results are indeed capturing the impact of expected dowry and not of other variables that may be correlated with _Dowrycst_ .

# **8 Conclusion**

A large literature has shown that culture matters for economic outcomes. More narrowly, there is a small but emerging body of work that highlights the importance of marriage-related cultural norms and institutions for households’ decision-making. Despite the wide prevalence of bride-togroom marriage payments, i.e., dowries, in several developing countries, economists have not directly investigated their impacts on financial and childbearing decisions, and on human capital investments in children. This is due to both the lack of data on dowry and the lack of a credible identification strategy. In this paper, we make use of an under-utilized source of nationally representative dowry data from India and propose a novel estimation strategy to examine the impact of future dowry payments on current outcomes.

We find several important results. This is the first paper, that we are aware of, that proposes an alternative motive for savings behavior in dowry-paying societies: the prospect of lump-sum dowry expense induces firstborn-girl families to start saving more in advance relative to firstborn-boy families in rural India. The ability of parents to overcome barriers to savings, especially behavioral biases such as imperfect self-control, in the context of saving for dowry, suggests that it is crucial to take into account the cultural context while designing policies that seek to affect saving behavior. We find that the increased savings take the form of formal savings in financial institutions and not 21