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The Unintended Consequences of Relaxing Birth Quotas: Theory and Evidence

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  • Jin, Zhangfeng
  • Pan, Shiyuan
  • Zheng, Zhijie

Abstract

This study examines the consequences of relaxing birth quotas by exploiting an exogenous two-child policy adopted by local Chinese governments on different dates. Using China's 2015 population census combined with a difference-in-differences framework, we find that the adoption of a two-child policy substantially increases the number of second-child births. The impact of the policy is more pronounced among couples who have higher fertility preferences and who are less sensitive to child-rearing costs. At the same time, this policy substantially decreases the number of first-child births. Child-rearing costs are a likely underlying mechanism for this decrease. All of these findings are in line with an extended Barro-Becker model.

Suggested Citation

  • 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).
    • Handle: RePEc:zbw:glodps:819
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    More about this item

    Keywords

    two-child policy; fertility preferences; child-rearing cost; childbearing decision; China;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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