Why has the birth rate relatively increased in China's wealthy cities?

Chen, Nana and Xu, Hangtian (2021): Why has the birth rate relatively increased in China's wealthy cities?

Abstract

China’s wealthy cities tended to have low birth rates in past decades, but this relationship has disappeared in conjunction with the substantial relaxation of the one-child policy after 2011. This study develops a conceptual framework for the relationship between average household wealth and compliance with the one-child policy across cities and concludes that the compliance rate was greater in wealthier cities when above-quota births were fined according to household wealth and with limited liability. The relaxation of this policy has eliminated this inequality, leading to an increase in wealthy cities’ birth rates relative to those of other cities. A causal analysis exploiting variations in city-level birth rates and fertility policy compliance rates from 2008 to 2019 supports our hypotheses. Moreover, our results suggest that the fertility relaxation has resulted in a greater proportion of newborns in wealthy cities, which is expected to increase the next generation’s human capital.

• Item Type: MPRA Paper
• Language: English
• Keywords: one-child policy; two-child policy; birth rate; household income; China
• Subjects: J - Labor and Demographic Economics > J1 - Demographic Economics > J13 - Fertility ; Family Planning ; Child Care ; Children ; Youth; J - Labor and Demographic Economics > J1 - Demographic Economics > J18 - Public Policy; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R10 - General

References

Agarwal, S., K. Li, Y. Qin, and J. Wu (2020) The impact of fertility relaxation on female labor market outcomes. Unpublished document: National University of Singapore and Tsinghua University.

Attané, I. (2016) Second child decisions in China, Population and Development Review, 42: 519-536.

Bar, M., M. Hazan, O. Leukhina, O. Weiss, and H. Zoabi (2018) Why did rich families increase their fertility? Inequality and marketization of child care, Journal of Economic Growth, 23: 427-463.

Becker, G. S. (1960) An economic analysis of fertility. In: Roberts, G. B. (Eds.), Demographic and Economic Change in Development Countries. New York: Columbia University Press.

Blackburn, K. and G. P. Cipriani (2002) A model of longevity, fertility and growth, Journal of Economic Dynamics and Control, 26: 187-204.

Bongaarts, J. and T. Sobotka (2012) A demographic explanation for the recent rise in European fertility, Population and Development Review, 38: 83-120.

Chen, W. and Y. Jin (2014) How well has China’s family planning policy worked: A micro level analysis (In Chinese), Population and Economy, 205: 118-128.

Chen, W. and L. Wu (2006) The relationship between migration and fertility in China (In Chinese), Population Research, 30: 13-20.

Clark, W., D. Yi, and X. Zhang (2020) Do house prices affect fertility behavior in China? An empirical examination, International Regional Science Review, 43: 423-449.

Dettling, L. J. and M. S. Kearney (2014) House prices and birth rates: The impact of the real estate market on the decision to have a baby, Journal of Public Economics, 110: 82-100.

Ebenstein, A. (2010) The “Missing Girls” of China and the unintended consequences of the One-Child Policy, Journal of Human Resources, 45: 87-115.

Esping-Andersen, G. and F. C. Billari (2015) Re-theorizing family demographics, Population and Development Review, 41: 1-31.

Fernihough, A. (2017) Human capital and the quantity–quality trade-off during the demographic transition, Journal of Economic Growth, 22: 35-65.

Fox, J., S. Klüsener, and M. Myrskylä (2019) Is a positive relationship between fertility and economic development emerging at the sub-national regional level? Theoretical considerations and evidence from Europe, European Journal of Population, 35: 487-518.

Galor, O. and D. N. Weil (2000) Population, technology, and growth: From Malthusian stagnation to the demographic transition and beyond, American Economic Review, 90: 806-828.

Ge, Y. and X. Zhang (2019) The effect of housing price on family fertility decision in China (In Chinese), Population Research, 43: 52-63.

Goldscheider, F., E. Bernhardt, and T. Lappegård (2015) The gender revolution: A framework for understanding changing family and demographic behavior, Population and Development Review, 41: 207-239.

Goldstein, J., T. Sobotka, and A. Jasilioniene (2009) The end of “lowest-low” fertility? Population and Development Review, 35: 663-699.

Goodkind, D. (2017) The astonishing population averted by China’s birth restrictions: Estimates, nightmares, and reprogrammed ambitions, Demography, 54: 1375-1400.

Greenhalgh, S., C. Zhu, and N. Li (1994) Restraining population growth in three Chinese villages, 1988-93, Population and Development Review, 20: 365-395.

Gu, B., F. Wang, Z. Guo, and E. Zhang (2007) China’s local and national fertility policies at the end of the Twentieth Century, Population and Development Review, 33: 129-147.

Guo, Z. (2010) The impacts of floating population on current fertility in China (In Chinese), Population Research, 34: 19-29.

Iwasaki, I. and X. Ma (2020) Gender wage gap in China: A large meta-analysis. Journal for Labour Market Research, forthcoming.

Iyigun, M. F. (2000) Timing of childbearing and economic growth, Journal of Development Economics, 61: 255-269.

Kirk, D. (1996) Demographic transition theory, Population Studies, 50: 361-387.

Kulu, H. and A. Vikat (2007) Fertility differences by housing type: The effect of housing conditions or of selective moves? Demographic Research, 17: 775-801.

Li, D. and Z. Guo (2014) Fertility level of floating population in China: An analysis based on the national floating population dynamic monitoring survey data (In Chinese), Chinese Journal of Population Science, 34: 17-29.

Li, H., M. Xue, S. Hellerstein, Y. Cai, Y. Gao, Y. Zhang, J. Qiao, J. Blustein, and J. Liu (2019) Association of China’s universal two child policy with changes in births and birth related health factors: National, descriptive comparative study, The BMJ, 366: l4680.

Li, H. and J. Zhang (2003) Fines, limited liability and fertility. Unpublished document: The Chinese University of Hong Kong.

Liang, J., Y. Mu, X. Li, W. Tang, Y. Wang, Z. Liu, X. Huang, R. W. Scherpbier, S. Guo, M. Li, L. Dai, K. Deng, C. Deng, Q. Li, L. Kang, J. Zhu, and C. Ronsmans (2018) Relaxation of the one child policy and trends in caesarean section rates and birth outcomes in China between 2012 and 2016: Observational study of nearly seven million health facility births, The BMJ, 360: k817.

Liu, J. and W. Chen (2019) China’s low fertility trends (In Chinese), Population and Economy, 237: 70-81.

Liu, J., C. Xing, and Q. Zhang (2020) House price, fertility rates and reproductive intentions, China Economic Review, 62: 101496.

Luci-Greulich, A. and O. Thévenon (2014) Does economic advancement ‘cause’ a re-increase in fertility? An empirical analysis for OECD countries (1960-2007), European Journal of Population, 30: 187-221.

Myrskylä, M., H. P. Kohler, and F. Billari (2009) Advances in development reverse fertility declines. Nature, 460: 741-743.

National Health Commission of the People’s Republic of China (2020) The 2019 National Statistical Bulletin on the Development of Health Services. June 6, 2020.

Ohinata, A. and D. Varvarigos (2020) Demographic transition and fertility rebound in economic development, Scandinavian Journal of Economics, 122: 1640-1670.

Öst, C. E. (2012) Housing and children: Simultaneous decisions? — A cohort study of young adults’ housing and family formation decision, Journal of Population Economics, 25: 349-366.

People’s Daily Online (2013) Social maintenance fee payments in 24 provinces exceed 20 billion yuan. December 5, 2013.

Qiao, X. (2015) The effect of the Two-Child Policy and the choice of future fertility policies (In Chinese), Chinese Journal of Population Science, 35: 26-33.

Reuters (2014) Chinese director Zhang Yimou fined $1.2 million for violating one-child policy. January 9, 2014.

Shi, R., N. Chen, and Q. Zheng (2018) Evaluating the effect of fertility policy adjustments in China (In Chinese), Chinese Journal of Population Science, 38: 114-125.

Short, S. E. and F. Y. Zhai (1998) Looking locally at China’s one-child policy, Studies in Family Planning, 29: 373-387.

Wang, X. and J. Zhang (2018) Beyond the quantity-quality tradeoff: Population control policy and human capital investment, Journal of Development Economics, 135: 222-234.

Weller, R. H. (1977) Wife’s employment and cumulative family size in the United States, 1970 and 1960, Demography, 14: 43-65.

Yi, J. and J. Zhang (2010) The effect of house price on fertility: Evidence from Hong Kong, Economic Inquiry, 48: 635-650.

Zeng, Y. and T. Hesketh (2016) The effects of China’s universal two-child policy, Lancet, 388: 1930-1938.

Zhang, L. (2006) A historical review on the changes of sex ratio at birth and fertility level of Chinese ethnic minorities since the 1980s (In Chinese), Population and Economy, 158: 66-70.

Zhou, H. (2015) The effect of migration on fertility (In Chinese), Population Research, 39: 14-28.