Dragon Babies

59 Pages Posted: 8 Sep 2017 Last revised: 18 Nov 2017

Sumit Agarwal

National University of Singapore

Wenlan Qian

National University of Singapore - NUS Business School

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate

Poh Lin Tan

National University of Singapore (NUS) - Lee Kuan Yew School of Public Policy

Date Written: November 1, 2017

Abstract

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

Agarwal, Sumit and Qian, Wenlan and Sing, Tien Foo and Tan, Poh Lin, Dragon Babies (November 1, 2017). Georgetown McDonough School of Business Research Paper No. 3032575. Available at SSRN: https://ssrn.com/abstract=3032575 or http://dx.doi.org/10.2139/ssrn.3032575

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Wenlan Qian

National University of Singapore - NUS Business School ( email )

15 Kent Ridge Drive
Singapore 117592, 119245
Singapore
(65) 65163015 (Phone)

HOME PAGE: http://sites.google.com/site/wenlanqian/

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate ( email )

4 Architecture Drive
Singapore 117566
Singapore

Poh Lin Tan (Contact Author)

National University of Singapore (NUS) - Lee Kuan Yew School of Public Policy ( email )

Singapore 117591
Singapore

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