Shackled to the Soil? Inherited Land, Birth Order, and Labor Mobility

Abstract

The inheritance of wealth promotes occupational choice, but may restrict it where its use is con- strained by limited markets and cultural norms. This paper investigates the effects of inheriting agricultural land in rural India and finds that while larger inheritances, on average, increase future household consumption, first-born sons do not experience these gains. For first-borns, inheriting land reduces urban migration and entry into non-agricultural work. In contrast, inheriting land does not influence occupational choice or migration for latter-born sons. I attribute these differences, in part, to a cultural norm of parental support incumbent on first-borns and its interaction with inherited land. Patrilineal Hindu inheritance customs, whereby sons inherit an equal amount of their parents’ land, motivate sibling sex composition as an instrument for land. In support of instrument exogeneity, I find no reduced form effects for individuals with landless parents.

Keywords: Occupational Choice, Land Market Frictions, Inherited Assets, Cultural Norms

JEL Classification: O12, J24, C26, J62