‘Til Dowry Do Us Part: Bargaining and Violence in Indian Families Rossella Calvi∗ Ajinkya Keskar† November 2020 Abstract Dowries are wealth transfers at the time of marriage from the bride’s family to the groom’s family. In India, such transfers are widespread, sizable, and often associated with extreme forms of gender inequality. To better understand this issue, we develop a non-cooperative bargaining model with incomplete information linking dowry payments, domestic violence, the allocation of resources between a husband and a wife, and separation. Our model generates several predictions, which we test empirically using amendments to the Indian anti-dowry law as a natural experiment. We first confirm that the amendments were successful in decreasing dowry payments. In line with the model predictions, we document a sharp decline in women’s decision-making power and separations, and a surge in domestic violence following the reforms. These unintended consequences are attenuated when social stigma against separation is low and, in some circum- stances, when gains from marriage are high. Whenever possible, parents increase their investment in the human capital of their daughters to compensate for lower dowries. Keywords: Domestic violence, dowry, non-cooperative bargaining, India, marital surplus, women’s empow- erment. JEL codes: D13, I31, J12, O15. ∗Corresponding author: Rice University, Department of Economics, Houston, TX. E-mail:
[email protected]. †Rice University, Department of Economics, Houston, TX. E-mail:
[email protected].