China’s One-Child Policy, Fertility, and the '1.5-Child Policy'

Abstract

The one-child policy in China is characterized by exceptions that vary across regions and time. In the second half of the 1980s, some provinces began to allow rural families to have a second child without sanctions if their first child is a girl. Using provincial data from 1979 to 2000, I examine the effect of the “1.5-child policy” on fertility behavior. Despite the large proportion of the population potentially eligible for the exception, I find that the policy had weak overall effects on crude birth rates. It had stronger effects on the proportion of higher-order births among new births. In addition, in poorer areas, the policy’s effect on crude birth rates is larger but its effect on higher-order births is smaller. The small fertility incentive effects appear to be consistent with the hypothesis that the 1.5-child policy largely represents a wealth transfer from the government to rural families. Since it is common for rural families to have more than one child and face penalties in the absence of the exception, returning the entitlement to have a second child should increase the endowment of rural families whilst the increase in the birth rate remains modest. More evidence from micro-level data is needed to further confirm these results.

Keywords: J13, J18

JEL Classification: One-child policy, fertility