The invisible hand in Asia’s heirs race

This year’s Nobel Prize for economics was co-awarded to Lloyd Shapley, an American mathematician whose contribution to game theory has its origins in a 1962 paper, ‘College Admissions and the Stability of Marriage’.

Comparing college admissions to the marriage market, he and co-author David Gale devised an algorithm to illustrate the market for stable marriages. The model used equal numbers of men and women who ranked their preferences among those of the opposite gender. Over iterative dating games, the Nash equilibrium of marriage stability arrived where women accepted the most-preferred men of remaining singletons. Extension of the algorithm since has helped match trainee doctors to hospitals and even donated organs to patients.

How might Shapley’s game lead to a Nash equilibrium in cases of greater numbers of heterosexual men than women? Sex ratio at birth (SRB) is the balance of male live births to female lives births. The biologically normal SRB ranges from 103 to 106 males per 100 females. In recent decades in some South Asian, East Asia and Central Asian countries, ratios as high as 130 males per 100 female births have been observed. In terms of absolute numbers of male births above the biological norm, bias in the SRB of the world’s two most populous countries, China and India, presents both a new extreme and a horizontal perspective on the global gender gap.

In China’s extreme case, between 2005 and 2010 the SRB was 120 male live births to 100 female live births. In 2012, Chinese state news reported the national gender ratio to be 117.78. Some provinces have much higher ratios, with one census survey from 2005 finding six provinces to have sex ratios in excess of 130. Jiangxi, Hainan and Guangdong in China’s south are reported to have the most skewed ratios, with Guangdong alone expected to have five million bachelors by 2030. In India, in the absence of population control measures, the latest estimates for 2011 show that the ratio of boys to 100 girl births is 108.8. The states of Haryana, Punjab and Delhi have been estimated to have the most biased ratios, with sex ratios at birth of 118.8, 117.1 and 115.7 respectively.

These striking deviations from the biologically normal ratio have been exacerbated since the early 1980s, when the arrival of the ultrasound took the lottery out of the preference for sons. They persist despite the fact that gender-related abortions are illegal in both countries. China’s case is extreme owing to the coincidental timing of population controls in the form of the one child policy. According to the state-run Xinhua News Agency’s report on research by the National State Population and Family Planning Commission, it is projected that males of marriage age will out-number females by 20–30 million by 2020. What of the dynamics and broader multipliers in Shapley’s dating game under such imbalanced conditions? The evolving dynamic may go beyond ‘dating’ and be more akin to a race — an ‘heirs race’. The term captures the duality in the familial race to have an heir, and the consequential and later race among heirs for a bride.

Identified multipliers of the phenomenon are increasing. In India, cases of abduction, trafficking and polyandrous marriages are rising. Men are also marrying at older ages, increasing the age gap to their partner. Similarly, cross-regional marriages are increasing, thereby increasing social isolation and reducing familial support mechanisms. In the case of Vietnam, gender imbalance has been associated not only with the marriage market squeeze, but also with migration, trafficking, importation of women and increased gender-based violence. Cambodia was the first country in the region to introduce restrictions on foreign men marrying local women. In 2011, it passed a law to ban marriages of foreign men to local women unless the foreign man is 50 years or younger and has a monthly income of at least US$2500.

Broader macroeconomic effects are only beginning to be understood: for example, families
 home to a bachelor have demonstrated higher savings rates. This helps to suppress aggregate consumption and affect property bubbles. Given the scale of China’s economy, such responses to the absolute gender gap may have global ramifications. Similarly, the drive of migrant workmen from these countries, often working in poor conditions at home and increasingly abroad, may also relate to the hopelessness of the gender imbalance at home. The consequential impacts, ‘bachelor’ effects, on policy effectiveness and labour conditions may be worth more extensive study. Least of all since the disparity in the number of marrying-age men and women has not peaked in terms of the cumulative effects of the now decades-long and continuing SRB bias.

Beyond Asia and gender imbalance, understanding the role of demographic forces in economic and policy outcomes is also important in light of the rapidly and unprecedentedly ageing populations of most of the world’s largest economies. The ‘invisible hand’ of the market may yet have a human face, or many of them, including those of Asia’s bachelors. East Asia Forum By Lauren Johnston PhD candidate at Peking University.