The gender education gap in developing countries: Roles of income shocks and culture

When exposed to an adverse income shock, cash-constrained households may lean on culture to select the gender of offspring whose outcomes will be sacrificed to enhance survival. We test this by studying how culture mediates the impact of drought on the gender education gap in two separate settings: Malawi and Indonesia. In so doing, we proxy culture with kinship traditions (matrilocality and patrilocality) and exploit drought episodes' spatial and temporal randomness as a source of exogenous variation in rural households' exposure to adverse income shocks. After accounting for grid and year-fixed effects, we find that patrilocal households, but not matrilocal ones, sacrifice their daughters' schooling in favor of sons' when they experience droughts and schooling requires payment of fees. These results survive numerous robustness checks and are driven by disparities in women's empowerment and the extent of son preference between matrilocal and patrilocal groups.