59 Pages Posted: 8 Sep 2017 Last revised: 18 Nov 2017
Date Written: November 1, 2017
Using multiple sources of individual-level administrative data from the multicultural city-state of Singapore, we study the life outcomes of large birth cohorts created by the Chinese superstitious practice of zodiac birth timing, where parents prefer to give birth in the year of the Dragon. This practice is followed exclusively by the Chinese majority — between 1960 and 2007 the average number of births jumps by 9.3% in Dragon years among the Chinese majority, with no similar patterns detected among non-Chinese minorities. Chinese Dragon babies earn significantly lower income than other Chinese cohorts after entering the labor market (by 6.0%), relative to the income difference between Dragons and non-Dragons within the non-Chinese subpopulation. The adverse labor market outcome is unlikely to be the result of self-selection; rather it reflects the aggregate resource implications of substantially larger cohort sizes. We find a significant negative income effect for the non-Chinese born in Dragon years as well as other birth cohorts who happen to enter college (and labor market) at the same time as Chinese Dragons. The negative income effect partly arises from the rather inelastic labor demand. Despite the government’s efforts to increase public educational resources, Dragon babies have lower admission chances to local national universities, suggesting limited capacity of such measures to accommodate the surge in demand for resources associated with larger birth cohorts. Finally, we also find evidence that the superstition-induced birth timing implicates consumption and saving choices.
Keywords: Cohort Size, Cohort Effect, Superstition, Fertility, Education, Income, Consumption, Consumer Behavior, Household Finance
JEL Classification: J21, J13
Suggested Citation: Suggested Citation