More Rights but Less Gains: Relaxed Birth Control Policy and the Loss for Women

• Published date: 01 March 2023
• Author: Ying Zhao,Lin Zhang,Yuanping Lu,Bo Wen
• Date: 01 March 2023
• DOI: http://doi.org/10.1111/cwe.12454

©2023 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 159–191, Vol. 31, No. 2, 2023 159

*Ying Zhao, Associate Professor, School of Public Finance and Taxation, Institute of Income Distribution

and Public Finance, Zhongnan University of Economics and Law, China. Email: zhaoying@zuel.edu.cn; Lin

Zhang, Associate Professor, School of Energy and Environment, City University of Hong Kong, China. Email:

l.zhang@cityu.edu.hk; Yuanping Lu, Professor, School of Public Finance and Taxation, Institute of Income

Distribution and Public Finance, Zhongnan University of Economics and Law, China. Email: yuanpinglu@

zuel.edu.cn; Bo Wen (corresponding author), Assistant Professor, College of Liberal Arts and Social Sciences,

City University of Hong Kong, City University of Hong Kong–Shenzhen Research Institute, China. Email:

Wen.Bo@cityu.edu.hk. This research was fi nancially supported by the National Natural Science Foundation

of China (Nos. 71804193, 72004189, and 72073144), Humanities and Social Science Foundation of Ministry

of Education of China (No. 19YJC790090), and the Programme of Innovation and Talent Base for Income

Distribution and Public Finance (No. B20084).

More Rights but Less Gains: Relaxed Birth Control

Policy and the Loss for Women

Ying Zhao, Lin Zhang, Yuanping Lu, Bo Wen*

Abstract

In view of its aging population, China initiated in 2012 a relaxed birth control policy

after a three-decades-long implementation of the restrictive one-child policy. This

paper examines how China’s relaxed birth control policy leads to gender inequality. It

specifi cally focuses on migrant workers because they account for a signifi cant portion of

the working group. Using the National Migrant Population Dynamic Monitoring Survey

from 2014 to 2016, we found that China’s two-child pilot policy reduced female labor

force participation by 1.4 percentage points. This negative eff ect was more pronounced

for women with higher educational levels or working in the private sector because

employers foresee greater risks of productivity decline. We demonstrated that the gender

pay gap increased from RMB956 to RMB1,053 during this same period. Pinpointing

these unintended consequences brought about by the relaxation of the one-child policy

helps provide a more complete picture of inequality and make sense of persistent relative

poverty in Chinese society. To counteract gender discrimination, females are advised to

work outside their home jurisdictions and take advantage of positive peer eff ects.

Keywords: birth control, gender inequality, migrant worker, two-child policy, wage gap

JEL codes: D63, J18, J61, J71

I. Introduction

The rationale underlying birth control policies stems from the Malthusian trap, where

more children would bring more demand, leading to an inadequate food supply,

Ying Zhao et al. / 159–191, Vol. 31, No. 2, 2023

©2023 Institute of World Economics and Politics, Chinese Academy of Social Sciences

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triggering individual distress, and resulting in social unrest (Malthus, 1798). From

Medieval Europe to Modern times, birth control was utilized worldwide to lower

regional population growth (McCann, 2009). These birth control eff orts, by and large,

have helped boost the labor participation rate and employment opportunities for

females as they are able to dedicate more years to their education. With the advances

in agricultural productivity and automation, however, the Malthusian trap pales in

comparison with the issue of population aging, which is directly attributable to the

presence of birth control policies and has gradually become a demographic crisis that

endangers the social structure of any economy.

In view of its aging population, for instance, China initiated a relaxed birth control

policy after the three-decades-long implementation of the restrictive one-child policy.

The relaxed policy, dubbed the two-child pilot policy, allowed a couple to have a second

baby if either the husband or the wife was from a single-child family. Female workers

were thus faced with the increased demands involved in caring for multiple children,

making it more difficult to achieve work–life balance. In this paper, we examine the

intricacies of the interplay between birth control and gender equality addressed in the

previous literature (Blau and Kahn, 2017). Specifi cally, we estimate the fi nancial impact

on women associated with the two-child pilot policy in China.

Our focus is on women’s employment opportunities and wage earnings before and

after the implementation of the two-child pilot policy and the implications of this policy

shift for gender equality. In contrast to prior literature on gender and income disparity, we

do not use variations in top income classes (Boschini et al., 2020) or across markets (Blau

and Kahn, 2017). Instead, we explore the income differences among migrant workers

over time. According to the national survey, China has more than 277 million rural

workers who have left the village or town associated with their hukou and have sought

employment elsewhere (Su et al., 2018).1 However, the majority of “rural migrants

in cities lead second-class lives without much access to urban benefits” (Su et al.,

2018, p. 143). With their low incomes, these workers are hardly able to diversify the

potential employment-related risks brought about by the changes in the birth control

policy. More troublingly, this employment-induced pressure has been found to be

passed on to the children of migrant parents, who are more likely to be academically

underperforming, engage in bullying, and suffer from physical and psychological

1China’s hukou system is more famously known as the Chinese household registration system. Under this

system, all households: (i) have to be registered in the locale where they reside, and (ii) are categorized as

either an “agricultural” or “nonagricultural” (i.e., “rural” or “urban”) type. Individuals without an “urban

household status” can still move to a city to work; however, they will neither be granted permanent residency

rights nor many of the associated social benefi ts by these cities.

©2023 Institute of World Economics and Politics, Chinese Academy of Social Sciences

Policy Relaxation a nd Women’s Losses 161

illnesses (Cui and To, 2019). Pinpointing the unintended consequences triggered by

the relaxation of the one-child policy helps attain a complete portrait of inequality and

makes sense of persistent relative poverty in Chinese society.

The empirical analysis in this study is based on a unique dataset from the National

Migrant Population Dynamic Monitoring Survey from 2014 to 2016. We focus solely

on this period because this pilot policy was implemented nationally in 2014, and a more

relaxed version of the two-child policy, in which the “single-child family” condition of

eligible parents was removed, was initiated in 2016. Given the fact that the adoption

of such a policy at the provincial level is unlikely to be affected by unobservable

information that may change the employability of female workers, our empirical

identifi cation relies on the exogeneity of the pilot policy in a diff erence-in-diff erences

setting.

Our main findings can be summarized as follows: the two-child pilot policy has

resulted in a signifi cant fi nancial loss for women in terms of their professional careers. It

lowered the employment rate of female workers by an additional 1.4 percentage points ─

a rate that was already fi ve percentage points lower when compared to that of males.

We further explore the variations by sector and education level over time and notice

that the negative effects elicited by the policy are more pronounced for women with

higher educational levels or those working in the private sector. Furthermore, women

experience wage discrimination when they work. For a position with an average wage

level of RMB3,032, female workers earn around RMB1,053 less compared to their male

counterparts. We attribute these estimated negative eff ects of the two-child pilot policy

on women’s careers largely to the foreseen risks of productivity decline in the eyes of

employers when females temporarily exit the labor market for gestation.

In the context of the existing literature, this study makes two key contributions.

So far, studies on China’s demographic policies have focused primarily on the macro-

level, revolving around understanding how the policy impacts the nation’s socio-

demographic structures (Guo, 2015) and household savings rate (Wei and Zhang, 2011).

Micro-level data, such as the relationship between population policies and individual

families’ work and birth decisions, are largely overlooked (Huang et al., 2016). In fact,

China’s fi rm implementation of the one-child policy over the past 3 decades has exerted

signifi cant eff ects on both the supply and demand sides of the labor market. The former

refers mainly to female workers’ behavioral patterns and career choices, whereas the

latter refers to employers’ perceptions and preferences toward female job seekers.

Yet, empirical analyses of these dimensions are scant (Adda et al., 2017). Given that

the relaxed birth control policy allows eligible families to give birth to a second child,

employers may have concerns about female workers’ ability to join, stay, or remain