Female Empowerment through Inheritance Rights: Evidence from India

The role of property rights in the process of economic development has been well-emphasized in the economic literature. Property rights, through their impact on distribution of wealth, patterns of production as well as development of markets, especially credit markets, have evolved as one of the prerequisites of economic growth and poverty reduction. The primary focus of this literature has been to study the impact of property rights on physical investment, but the role of property rights in the context of human capital investment is relatively under-researched. Moreover, most of the existing research remains gender-neutral, with little attention to the salience of property rights for women. This paper attempts to fill these gaps by studying the impact of property rights, particularly inheritance rights, on the human capital investment of women in the context of India.

Women in India enjoy far less rights than men, and this inequality is nowhere more obvious than in the context of inheritance rights. The institutional setting of inheritance law in India is such that the majority of the country is governed by the Hindu Succession Act of 1956, which is applicable not only to the Hindu majority, but also to the Buddhists, Sikhs and Jains. Muslims, Christians, Jews and Parsis, on the other hand, have their own inheritance laws laid down by their religion. Under the Hindu Succession Act, historically, the vast majority of women in India had no claim to joint family property, while their brothers did. Given that considerable amounts of property, especially rural land, is still jointly owned, this amounted to a very serious bias against them indeed.

Five states of India, viz. Andhra Pradesh, Karnataka, Tamil Nadu, Kerala and Maharashtra, amended the Hindu Succession Act in the late 1980s and 1990s, giving women equal right of inheritance to joint family property as men. For the reform to have any impact on her schooling decisions, a woman had to be born in a state that passed the reform and be of school-going age when the reform was passed. Thus exposure to the reform was jointly determined by state of birth and year of birth. I use this legal reform to test if an increase in inheritance rights has actually led to an improvement in the education of women in India.

Using multiple waves of the National Family and Health Survey (NFHS) dataset, I find that an improvement in female inheritance rights was associated with an increase of 0.5 to 1.3 in years of education (an increase of 11 to 25 percent) for the cohorts of women who were of school-going age at the time of the passage of reform. Moreover, this effect is only observed for Hindu, Buddhist, Sikh and Jain women, to whom the law applied, and not for Muslim, Christian, Jew or Parsi women who are governed by separate personal laws, which increased our confidence in the results.