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One-Child Policy, Marriage Distortion, and Welfare Loss

Author

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  • Huang, Wei

    (National University of Singapore)

  • Zhou, Yi

    (University of California, Berkeley)

Abstract

Using plausibly exogenous variations in the ethnicity-specific assigned birth quotas and different fertility penalties across Chinese provinces over time, we provide new evidence for the transferable utility model by showing how China's One-Child Policy induced a significantly higher unmarried rate among the population and more interethnic marriages in China. We further develop the model and find that a policy-induced welfare loss originates from not only restricted fertility but also from marriage distortion, and both depend solely on the corresponding reduced-form elasticities. Our calculations suggest that the total welfare loss is around 4.9 percent of yearly household income, with marriage distortion contributing 17 percent of this welfare loss. These findings highlight the importance of taking into consideration the unintended behavioral responses to public policies and the corresponding social consequences.

Suggested Citation

  • Huang, Wei & Zhou, Yi, 2015. "One-Child Policy, Marriage Distortion, and Welfare Loss," IZA Discussion Papers 9532, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9532
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    References listed on IDEAS

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    1. Ruixue Jia & Torsten Persson, 2019. "Individual vs. Social Motives in Identity Choice: Theory and Evidence from China," NBER Working Papers 26008, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Xu, Yuanwei, 2021. "Paying for the Selected Son: Sex Imbalance and Marriage Payments in China," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242436, Verein für Socialpolitik / German Economic Association.
    2. Liqiu Zhao & Minghai Zhou, 2018. "Do only children have poor vision? Evidence from China's One‐Child Policy," Health Economics, John Wiley & Sons, Ltd., vol. 27(7), pages 1131-1146, July.
    3. Pauline Rossi & Yun Xiao, 2024. "Spillovers in Childbearing Decisions and Fertility Transitions: Evidence from China," Journal of the European Economic Association, European Economic Association, vol. 22(1), pages 161-199.
    4. Raiber, Eva, 2017. "Expected Fertility and Educational Investment: Evidence from the One-Child-Policy in China," TSE Working Papers 17-853, Toulouse School of Economics (TSE).
    5. Chen, Yi & Fang, Hanming, 2021. "The long-term consequences of China's “Later, Longer, Fewer” campaign in old age," Journal of Development Economics, Elsevier, vol. 151(C).
    6. Baiyi Wu & Wenlong Bian & Ying Xue & Hao Zhang, 2021. "Confucian Culture and Homeownership: Evidence from Chinese Families," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 182-202, March.
    7. Zhang, Kezhong & He, Fan & Ma, Yuanyuan, 2021. "Sex ratios and mental health: Evidence from China," Economics & Human Biology, Elsevier, vol. 42(C).
    8. Huichao Du & Yun Xiao & Liqiu Zhao, 2021. "Education and gender role attitudes," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(2), pages 475-513, April.
    9. Lucie Giorgi & Eva Raiber, 2024. "For better or for babies: The effect of the two-child policy in China on who gets married," French Stata Users' Group Meetings 2024 13, Stata Users Group.
    10. Li, Wenchao & Song, Changcheng & Xu, Shu & Yi, Junjian, 2017. "Household Portfolio Choice, Reference Dependence, and the Marriage Market," IZA Discussion Papers 10528, Institute of Labor Economics (IZA).
    11. Yi Chen & Hanming Fang, 2018. "The Long-Term Consequences of Having Fewer Children in Old Age: Evidence from China’s “Later, Longer, Fewer” Campaign," NBER Working Papers 25041, National Bureau of Economic Research, Inc.
    12. Raiber, Eva, 2021. "Anticipated Children and Educational Investment: Evidence from the One-Child Policy in China," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242401, Verein für Socialpolitik / German Economic Association.
    13. Lu, Di, 2018. "China’s Selective Two-Child Policy and Its Impact on the Marriage Market," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181586, Verein für Socialpolitik / German Economic Association.
    14. Yi Chen & Yingfei Huang, 2020. "The power of the government: China's Family Planning Leading Group and the fertility decline of the 1970s," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 42(35), pages 985-1038.
    15. Fei Wang & Liqiu Zhao & Zhong Zhao, 2017. "China’s family planning policies and their labor market consequences," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 31-68, January.
    16. Jin, Zhangfeng & Pan, Shiyuan & Zheng, Zhijie, 2021. "The Unintended Consequences of Relaxing Birth Quotas: Theory and Evidence," GLO Discussion Paper Series 819, Global Labor Organization (GLO).
    17. Shuxi Zeng & Fan Li & Peng Ding, 2020. "Is being an only child harmful to psychological health?: evidence from an instrumental variable analysis of China's one‐child policy," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 183(4), pages 1615-1635, October.
    18. Andrew Francis-Tan & Zheng Mu, 2019. "Racial Revolution: Understanding the Resurgence of Ethnic Minority Identity in Modern China," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 38(5), pages 733-769, October.

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    More about this item

    Keywords

    welfare loss; marriage distortion; One-Child Policy;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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