Can incentives increase preference for daughters? Evidence from a cash transfer scheme in Haryana, India

The gender imbalance caused by a skewed female-to-male sex ratio remains a persistent problem in the Indian population despite rapid economic development in recent times. The low child sex ratio has resulted from both excess female infant mortality due to malnutrition and neglect, and sex-selective abortions, the roots of which lie in strong cultural preference for sons over daughters. Though the government banned prenatal sex determination techniques in 1994, many feel that it has been ineffective due to inadequate enforcement. Apart from the ban, the government also introduced other schemes and campaigns at the national and state level. These schemes often focus on changing parental perception and behavior towards daughters. Using two rounds of District Level Household Survey (DLHS) data, this study assesses the impact of Haryana's Ladli scheme, a conditional cash transfer scheme that provides incentive to parents for having a second daughter, on the likelihood of having daughters using a differences-in-differences approach with Punjab as a comparison state. The findings suggest that while the likelihood of having a daughter increased in Haryana compared with Punjab in the post-policy period, the effect is not statistically significant. However, restricting the sample to border districts in Haryana and Punjab showed some significant results.