Poster #19 - Child Quantity-Quality Trade-off: Evidence from China’s Relaxation of One-Child Policy

• In Event: Friday Poster Reception

Abstract

In the 1960s, the global population growth rate peaked at 2%, raising widespread concerns about the population bomb—the fear that rapid population growth would outpace resources, leading to famine, poverty, and environmental degradation. In response, 69 countries had implemented family planning policies to lower fertility as of 2019. At the household level, researchers have long debated how population growth affects household living standards. Becker and Lewis (1973) introduced the child quantity-quality (QQ) trade-off model, which treats children as consumption goods and parents as utility-maximizing agents constrained by household budgets. According to this model, an increase in the number of children requires a decrease in the resources allocated per child—unless parental income increases.

 

This study provides new empirical evidence supporting the QQ trade-off by exploiting exogenous variation from the relaxation of China’s One-Child Policy (OCP) across communities to estimate the causal effect of family size on educational expenditure for firstborn girls. Using panel data from the China Family Panel Studies (CFPS) from 2010 to 2022 and a two-stage least squares (2SLS) framework, I instrument family size with the interaction between the firstborn being a girl and eligibility to have a second child. Families are coded as eligible if they reside in communities where a second child is permitted when the firstborn is a girl. The instrument is strongly correlated with having a second child (F-statistic = 107.36), and 27% of eligible families with a firstborn girl had a second child. The 2SLS results show a significantly negative effect of having a second child on educational investment for firstborn girls—a reduction of 50.8 percentage points among compliers. The effect is even larger (a 56 percentage point reduction) when the second child is a boy, but no significant effect is observed when the second child is a girl. Furthermore, increased family size negatively impacts both fathers’ and mothers’ total income, intensifying the QQ trade-off.

 

This study makes three key contributions. First, it offers timely evidence on the QQ trade-off using recent longitudinal data from China, whereas most prior studies rely on older, cross-sectional data collected in very different economic contexts. With China’s rapid development and growing public investment in education, the magnitude and nature of the QQ trade-off may have evolved. Second, the study improves upon earlier work by using educational expenditure—a more direct measure of child quality and a better reflection of intra-household resource allocation—rather than educational attainment or enrollment. Third, the findings highlight unintended consequences of the OCP relaxation, particularly for firstborn girls, and offer new evidence of persistent son preference.

 

The results underscore the continued salience of son preference in China and highlight the need for targeted educational programs for firstborn girls. They also suggest that relaxation of fertility policies should be accompanied by investments in subsidized childcare, parental leave, and flexible work arrangements to mitigate the negative effects of larger family size on child quality.

Author

• Yingxin Zhang, The University of Texas at Austin
  Presenting Author