Eva Raiber

job market seminar

Eva Raiber

Anticipated fertility and educational investment: evidence from the one-child policy in China

IBD Amphi

Îlot Bernard du Bois - Amphithéâtre

5-9 boulevard Maurice Bourdet
13001 Marseille

Monday, January 14 2019| 2:30pm to 3:45pm

Does future anticipated fertility affect educational investment? Theory suggests that the number of children planned in the future can affect the returns to education, the resources available for family consumption and the incentives to find a partner. This paper uses varying eligibility criteria for second child permits during the One-Child Policy in China as a natural experiment, which provides plausible exogenous variation in the cost of the second child. I use second child permits that are conditional on time-invariant individual characteristics and show that they have a strong positive effect on the likelihood of having a second child between 1990 and 2005. They are therefore expected to change anticipated fertility among compliers. I find that fulfilling an eligibility criterion at secondary school age increases the time invested in education and the likelihood of continuing schooling after middle school. The effect appears concentrated in the subset of compliers: individuals who increase their anticipated number of children as a response to eligibility. It can be explained by the high cost of raising children, by the second child having at most a short-term effect on parental labour supply and by concerns about finding a spouse.