Hostname: page-component-586b7cd67f-gb8f7 Total loading time: 0 Render date: 2024-11-23T04:34:28.819Z Has data issue: false hasContentIssue false
  • English
  • Français

FERTILITY, HUMAN CAPITAL, AND INCOME: THE EFFECTS OF CHINA’S ONE-CHILD POLICY

Published online by Cambridge University Press:  18 January 2021

Jiajia Gu
Jiajia Gu*
Affiliation:
Jinan University
*
Address correspondence to: Jiajia Gu, 113A Zhonghui Building, Jinan University, 601 Huangpu West Avenue, Guangzhou510630, China. e-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper studies the effects of China’s one-child policy on human capital and income. I build and calibrate a quantitative OLG model with intergenerational transfers. The model generates a quantity–quality trade-off, so a restriction on fertility leads to an increase in human capital, and higher human capital then contributes to higher individual income and welfare. Calibrating the model to match survey data on urban households, I find that the one-child policy increases the human capital of affected agents by about 47% relative to a counterfactual with no fertility restrictions. However, the effect on aggregate income is negative as the size of the labor force falls.

Keywords

One-Child PolicyFertilityHuman Capital
Type
Articles
Information
Macroeconomic Dynamics , Volume 26 , Issue 4 , June 2022 , pp. 979 - 1020
Copyright
© 2021 Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

I am grateful to Keyu Jin and Rachel Ngai for their valuable advice and constant encouragement. I thank the two anonymous referees whose comments have greatly improved this paper. I thank Thomas Carr for editing this paper. All errors are mine.

References

Bai, C.-E., Hsieh, C.-T. and Qian, Y. (2006) The return to capital in China, Technical report, National Bureau of Economic Research.CrossRefGoogle Scholar
Banerjee, A., Meng, X., Porzio, T. and Qian, N. (2014) Aggregate fertility and household savings: A general equilibrium analysis using micro data, NBER Working Paper 20050.CrossRefGoogle Scholar
Becker, G. S. and Lewis, H. G. (1973) On the interaction between the quantity and quality of children. Journal of Political Economy 81(2), S279–S288.CrossRefGoogle Scholar
Becker, G. S. and Tomes, N. (1976) Child endowments and the quantity and quality of children. Journal of Political Economy 84(4), s143–s162.CrossRefGoogle Scholar
Ben-Porath, Y. (1967) The production of human capital and the life cycle of earnings. The Journal of Political Economy 75(4), 352–365.CrossRefGoogle Scholar
Chamarbagwala, R. (2011) Sibling composition and selective gender-based survival bias. Journal of Population Economics 24(3), 935–955.CrossRefGoogle Scholar
Chatterjee, S. and Vogl, T. (2018) Escaping malthus: Economic growth and fertility change in the developing world. American Economic Review 108(6), 1440–1467.CrossRefGoogle ScholarPubMed
Choukhmane, T., Coeurdacier, N. and Jin, K. (2014) The one-child policy and household savings, LSE Working Paper.Google Scholar
Cunha, F. and Heckman, J. (2007) The technology of skill formation. American Economic Review 97(2), 31–47.CrossRefGoogle Scholar
Ehrlich, I. and Lui, F. T. (1991) Intergenerational trade, longevity, and economic growth. Journal of Political Economy 99(5), 1029–1059.CrossRefGoogle Scholar
Fu, Q. and Ren, Q. (2010) Educational inequality under China’s rural–urban divide: The Hukou system and return to education. Environment and Planning A 42(3), 592–610.CrossRefGoogle Scholar
Guerriero, M. (2019) The labor share of income around the world: Evidence from a panel dataset.CrossRefGoogle Scholar
Hongyuan, S. and Yongliang, M. (2004) Measuring rual-urban disparity in China by human development index method. Economic Research Journal 11, 4–l5.Google Scholar
İmrohoroğlu, A. and Zhao, K. (2018) The Chinese saving rate: Long-term care risks, family insurance, and demographics. Journal of Monetary Economics 96, 33–52.CrossRefGoogle Scholar
Jones, C. I. (2019) The end of economic growth? Unintended consequences of a declining population, Technical report, Working Paper, Stanford University.CrossRefGoogle Scholar
Lee, M.-H. (2012) The one-child policy and gender equality in education in China: Evidence from household data. Journal of Family and Economic Issues 33(1), 41–52.CrossRefGoogle Scholar
Li, B. and Zhang, H. (2017) Does population control lead to better child quality? Evidence from China’s one-child policy enforcement. Journal of Comparative Economics 45(2), 246–260.CrossRefGoogle Scholar
Li, G., Wu, Z. and Pan, J. (2016) Annual Report on Urban Development of China No. 9 . Social Beijing, China: Science Academic Press, p. 363.Google ScholarPubMed
Li, H. and Zhang, J. (2007) Do high birth rates hamper economic growth? The Review of Economics and Statistics 89(1), 110–117.CrossRefGoogle Scholar
Liao, P.-J. (2013) The one-child policy: A macroeconomic analysis. Journal of Development Economics 101, 49–62.CrossRefGoogle Scholar
Manuelli, R. E. and Seshadri, A. (2014) Human capital and the wealth of nations. American Economic Review 104(9), 2736–2762.CrossRefGoogle Scholar
Mishra, V., Roy, T. K. and Retherford, R. D. (2004) Sex differentials in childhood feeding, health care, and nutritional status in India. Population and Development Review 30(2), 269–295.CrossRefGoogle Scholar
Myers, S. L., Wu, J. and Fu, C. (2019). China’s looming crisis: A shrinking population. https://www.nytimes.com/interactive/2019/01/17/world/asia/china-population-crisis.html Google Scholar
Qian, N. (2009) Quantity-quality and the one child policy: The only-child disadvantage in school enrollment in rural China, NBER Working Paper No. 14973.Google Scholar
Rosenblum, D. (2017) Estimating the private economic benefits of sons versus daughters in India. Feminist Economics 23(1), 77–107.CrossRefGoogle Scholar
Rosenzweig, M. R. and Zhang, J. (2009) Do population control policies induce more human capital investment? Twins, birth weight and China’s “one-child” policy. The Review of Economic Studies 76(3), 1149–1174.CrossRefGoogle Scholar
Ye, W. and Ding, Y. (1998) The cost of child care in Xiamen special economic zone. China Population and Economics (in Chinese) 6, 24–57.Google Scholar
Yi, J. and Zhang, J. (2010) The effect of house price on fertility: Evidence from Hong Kong, Economic Inquiry 48(3), 635–650.CrossRefGoogle Scholar
Young, A. (2003) Gold into base metals: Productivity growth in the People’s Republic of China during the reform period, Journal of Political Economy 111(6), 1220–1261.CrossRefGoogle Scholar
Zhang, J. (2017) The evolution of China’s one-child policy and its effects on family outcomes. Journal of Economic Perspectives 31(1), 141–160.CrossRefGoogle Scholar
Zhu, X. (2012) Understanding China’s growth: Past, present, and future. Journal of Economic Perspectives 26(4), 103–124.CrossRefGoogle Scholar
Zhu, X., Whalley, J. and Zhao, X. (2014) Intergenerational transfer, human capital and long-term growth in China under the one child policy. Economic Modelling 40, 275–283.CrossRefGoogle Scholar