Consanguinity and other marriage market effects of a wealth shock in Bangladesh

This paper uses a wealth shock from the construction of a flood protection embankment in rural Bangladesh coupled with data on the universe of all 52,000 marriage decisions between 1982 and 1996 to examine changes in marital prospects for households protected by the embankment relative to unprotected households living on the other side of the river. We use difference-in-difference specifications to document that brides from protected households commanded larger dowries, married wealthier households, and became less likely to marry biological relatives. Financial liquidity-constrained households appear to use within-family marriage (in which one can promise ex-post payments) as a form of credit to meet up-front dowry demands, but the resultant wealth shock for households protected by the embankment relaxed this need to marry consanguineously. Our results shed light on the socioeconomic roots of consanguinity, which carries health risks for offspring but can also carry substantial benefits for the families involved. © 2013 Population Association of America.