# **1. Introduction and Motivation**

Since the early 1990s, several states in India have introduced financial incentive programs to discourage son preference among parents and to encourage investments in daughters’ education and health. While beneficiary assessments have been carried out, there have been no formal impact evaluations to date. This study evaluates the early effects of _Apni Beti Apna Dhan_ (Our Daughter, Our Wealth), a program in the Indian state of Haryana that provides financial transfers to families upon the birth of girls. Since 1994, eligible parents who give birth to daughters have been offered an immediate financial grant, coupled with a long-term savings bond redeemable by the unmarried daughter at the age of 18. Additional incentives are further introduced based on increasing educational attainment. The policy objective was to reduce widespread discrimination against girls, encourage later marriage and increase parents’ investment in daughters’ human capital. Using household survey data on fertility and child health, we estimate the early impact of the program on children’s health (mortality, nutritional status) and schooling, focusing on gender differences in impacts.

This paper contributes to at least three strands of ongoing research in development economics. Firstly, the academic and policy literature has seen a surge of interest in the impact of conditional cash transfer (CCT) programs. Evaluations of CCT in Latin America and South Asia generally show these programs to be effective in raising households’ investment in children (Das, Do and Ozler 2006; de Janvry and Sadoulet 2006). The _Apni Beti Apna Dhan_ program is different from most well-known CCT programs (e.g. Mexico’s _Oportunidades_ or Bangladesh’s Female Secondary School Stipend Program) in both the type of conditionality (daughter’s birth and marriage delay) and the long, 18-year period over which transfers are made. This program design raises new questions about the efficacy of such incentives in a novel design that merits further empirical study.

Secondly, impact evaluation of this program will address the broader economic question of how parents adjust investments in children's human capital when their fertility choices change. The large literature on the impact of child quantity on child quality focuses on understanding the impact of the birth of an additional child on parental investments in children’s human capital (Rosenzweig and Wolpin 1980; Rosenzweig and Schultz 1987; Pitt, Rosenzweig and Gibbons 1993; Sinha 2006). In this literature the source of the change in parent’s fertility choices stems from twin births, unplanned pregnancies or access to contraceptives or family planning programs. The _Apni Beti Apna Dhan_ program changes parents’ fertility choices by subsidizing the birth of a girl – a change in the price of having an additional child unlike that induced by family planning programs or twin births. The quantity-quality literature would suggest that an additional birth could decrease parent’s investment in daughters’ human capital. However, the transfer also raises eligible households’ income which could likely increase their demand for daughters’ health and schooling. Which effect prevails is an empirical question and one that this paper attempts to answer.

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