The Impact of Fertility Relaxation on Female Labor Market Outcomes

63 Pages Posted: 10 Jan 2020 Last revised: 22 May 2020

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Keyang Li

Tsinghua University - Hang Lung Center for Real Estate; Tsinghua University - Department of Construction Management

Yu Qin

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

Jing Wu

Tsinghua University - Hang Lung Center for Real Estate; Tsinghua University - Department of Construction Management

Date Written: December 20, 2019

Abstract

In this study, we explore a 2013 policy shock that relaxed the One-Child Policy in China: couples were permitted to have two children if one parent is an only child. Exploiting employer-employee matched data encompassing 5.4 million employees in a major city, we show that after the policy shock the salary of female new hires is reduced by 1.2% relative to the salary of male new hires, equivalent to a 22% increase in the gender wage gap in the data. In addition, employers hire 4.4% fewer female employees relative to male after the relaxation of fertility restrictions, and female employees are 4.3% less likely to leave their current jobs after the policy change. In aggregate, this leads to approximately 1,950 fewer female employees employed every month and 1,059 fewer female employees leaving their jobs every month in the sample city.

Keywords: one-child policy; gender discrimination; gender wage gap; labor market

JEL Classification: J78; J71; J13

Suggested Citation

Agarwal, Sumit and Li, Keyang and Qin, Yu and Wu, Jing, The Impact of Fertility Relaxation on Female Labor Market Outcomes (December 20, 2019). Available at SSRN: https://ssrn.com/abstract=3507515 or http://dx.doi.org/10.2139/ssrn.3507515

Sumit Agarwal (Contact Author)

National University of Singapore ( email )

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

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

Keyang Li

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

Tsinghua University - Department of Construction Management ( email )

Heshanheng Building
Tsinghua University
Beijing, 100084
China

Yu Qin

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

4 Architecture Drive
Singapore 117566
Singapore

Jing Wu

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

Tsinghua University - Department of Construction Management ( email )

Heshanheng Building
Tsinghua University
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

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