Fertility and Female Labor Force Participation: Evidence from the One-Child Policy in China

Unlike in the United States where fertility is found to be negatively correlated with female labor force participation, China has witnessed a decrease in both fertility and female labor force participation since the 1980s. Does fertility play a different role in female labor force participation in China than in the U.S.? To answer this question, this paper exploits plausibly exogenous variations in fertility created by the affirmative One-Child Policy in China to estimate the effect of having two or more children on the mother’s labor force participation. Using a large data set from the 1990 Population Census, I find that OLS underestimates the negative effects of fertility, and 2SLS estimates imply that conditional on having one child, additional children decreases mother’s female labor force participation by 8-15 percentage points in rural China