Fertility and Female Labor Force Participation: Evidence from 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 afffirmative 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, we find that though OLS shows positive effects of fertility, 2SLS will report negative effects of having two or more children on female labor force participation in rural China