Returns to Education in the Marriage Market: Bride Price and School Reform in Egypt

This paper posits marriage market returns as a contributing factor to stagnant female labor force participation despite increasing female education. The paper examines the marriage market returns of female education by exploiting a very direct measure of returns: bride price, a significant amount of resources transferred by the groom at the time of marriage. The paper also looks at current and future husband's wages as additional sources of returns. It addresses endogeneity and identification issues by exploiting a school reform in Egypt that reduced the number of years required to complete primary education from six to five. The staggered rollout of the reform generates exogenous sources of variation in female schooling both across and within cohorts and administrative units. The analysis implements an instrumental variable estimator with fixed effects at the cohort and at the administrative unit level. The estimated return to a bride's compulsory education is about 100% for bride price, about 14% for husband's wage at the time of marriage, and about 16% for a measure of husband's permanent income. Importantly, these returns to education in the marriage market are much higher than the returns to education that Egyptian women experience in the labor market. Additional empirical evidence suggests that educational assortative mating could be an important mechanism through which the marriage market returns are taking place.