The One-child Policy: A Macroeconomic Analysis

This paper studies the effects of a one-child policy. A benchmark without the fertility constraint is compared to a counterfactual experiment with the fertility constraint in place. The results suggest that imposition of a one-child policy promotes the accumulation of human capital and increases per capita output. In partial equilibrium, an unskilled adult’s welfare is lowered by the policy. However, in general equilibrium, the policy triggers a decrease in the supply of unskilled labor, which increases the unskilled wage rate. Thus, an unskilled adult is in fact better off with the policy due to higher wages. This paper demonstrates the importance of accounting for general-equilibrium effects and heterogeneity when analyzing popu-