The Impact of Fertility Relaxation on Female Labor Market Outcomes
63 Pages Posted: 10 Jan 2020 Last revised: 22 May 2020
Date Written: December 20, 2019
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: Suggested Citation