Fertility Restrictions and Life Cycle Outcomes: Evidence from the One Child Policy in China

I use the experience of China’s One Child Policy to examine how fertility restrictions affect economic and social outcomes over the lifetime. The One Child Policy imposed a birth quota and heavy penalties for “out-of-plan” births. Using variation in the fertility penalties across provinces over time, I examine how fertility restrictions imposed early in the lives of individuals affected their educational attainment, marriage and fertility decisions, and later life economic outcomes. Exposure to stricter fertility restrictions when young leads to higher education, more white-collar jobs, delayed marriage, and lower fertility. Further consequences include higher household income, consumption, and saving. Finally, exposure to stricter fertility restrictions in early life increases female empowerment as measured by an increase in the fraction of households headed by women, female-oriented consumption and gender-equal opinions. Overall, fertility restrictions imposed when agents are young have powerful effects throughout the life cycle. (JEL classification: H70, I20, J00, O12)