Princely states and gender differential in human capital invesment Sutanuka Roy ∗ Hiu F. Tam y June, 2016 1 Introduction Gender inequality in education is part of traditional cultures in many developing countries, where women get married earlier, are less educated and have poorer health outcomes than men(World Bank, 2012). Besides being a serious concern in terms of equality of opportunity, it may also slow down economic growth (Klasen, 2002).1 Our paper investigates whether the regions of India that have historically had legal institutions that fostered women's rights have better gender outcomes in the modern day. The analysis provides the basis for direct policy interventions on gender-biased social norms and practices in society. This is the first paper, to our knowledge, that investigates historical legal reforms to understand their long-run impact on gender outcomes. The paper contributes to the literature on the impact of colonial institutions on modern day outcomes. While the literature on colonial institutions mainly focuses on changes in modern institutions (Acemoglu et al. (2001); Acemoglu and Johnson (2005)), our paper is closer to within country analysis, as in Michalopoulos and Papaioannou (2013) and Dell et al. (2015), showing that modern economic outcomes can be explained by the persistence of informal insti- tutions. We contribute to the literature by studying the long-run impact of colonial institutions on household decisions on education and marriage, holding modern institutions constant. First, we map gender inequality in terms of education and marriage in modern India to historical ∗Department of Economics, London School of Economics,
[email protected] yDepartment of Economics, London School of Economics,
[email protected] 1Klasen (2002) finds that gender inequality in education is correlated with slower economic growth, both directly by lowering average human capital, and indirectly through its impact on investment and population growth.