One-Child Policy, Marriage Distortion and Welfare Loss

Citation:

Huang, Wei, and Yi Zhou. β€œOne-Child Policy, Marriage Distortion and Welfare Loss,” Working Paper.

Abstract:

This paper studies the marriage distortion and the associated welfare loss caused by the One-Child Policy (OCP) in China. Using the variation in the ethnicity-specific assigned birth quotas and different fertility penalties across provinces over time, we first show that the OCP induced a significantly higher unmarried rate and more interethnic marriages. Using the sufficient statistics approach, we derive a formula for the social welfare loss caused by the OCP-induced lower fertility and marriage distortion, and it only depends on the estimated reduced-form elasticities. Our estimates imply that the welfare loss caused by lowered fertility and marriage distortion is 2.6 and 1.1 percent of annual household income, respectively. (JEL codes: I31, J12, J13, J18)
Keywords: One-Child Policy, Marriage Distortion, Welfare Loss

Last updated on 10/14/2016