Chinese household saving and dependent children: Theory and evidence

This paper examines the impact of family size on household saving. We first study a theoretical life-cycle model that includes finite lifetimes and saving for retirement and in which parents care about the consumption by their dependent children. The model implies a negative relationship between the number of dependent children in the family and the household saving rate. Then, we test the model's implications using new survey data on household finances in China. We use the differential enforcement of the one-child policy across counties to address the possible endogeneity between household saving and fertility decisions in a two-stage least squares Tobit regression. We find that Chinese families with fewer dependent children have significantly higher saving rates. The data yields several additional insights on household saving patterns. Households with college-age children have lower saving rates, and households residing in urban areas have higher saving rates and a lower ratio of education expenditures to income. However, having an additional child reduces saving rates more for households in urban areas than in rural areas. Our regressions also indicate that saving rates vary with age and tend to be higher for households with more workers, higher education, better health, and more assets.     

The impact of education on income inequality and intergenerational mobility

This paper analyses the effects of innate ability, compulsory education (grades 1–9), and non-compulsory education (grades 10–12 and higher education) on inequality and intergenerational mobility of income, by constructing a four-period overlapping-generation model. We find that innate ability and family investment in early education play important roles in explaining income inequality and intergenerational income mobility. Though children from the wealthiest families are only 1.36 times ‘smarter’ that those from the poorest, the gap in human capital expands to 2.35 at the end of compulsory education and to 2.89 at the end of non-compulsory education. One important reason for the increase is that poor families invest relatively less in children's early education than do wealthy families; therefore, their children attend lower-quality schools, which results in them being much less likely to participate in higher education. By simulating policy experiments for different types of government education expenditure, we find that direct subsidies to poor parents are the most efficient and effective policy for mitigating poor families' budget constraints with regard to early-education investment in their children.     

Causal effects of family income on educational investment and child outcomes: Evidence from a policy reform in Japan

The Child Allowance Policy (CAP) in Japan, a nationwide cash transfer program for families with children, was designed to increase household expenditures toward children. Using unforeseen changes in the CAP that occurred due to the electoral results as a source of exogenous variation in income in the early 2010s, this paper examines the causal impact of family income on households’ private educational expenditures and child outcomes in the short-run, based on a longitudinal parent-child survey. The ordinary least squares (OLS) and first-differenced (FD) results show that family income is in most cases positively correlated with child's cognitive outcomes, and, to a lesser extent, with families’ educational expenditure on their children. Based on the FD instrumental variable (FD-IV) estimation, using unexpected changes in CAP payments as an instrument, we find positive income effects on educational expenditure in the short-run. However, we did not find statistically significant impacts on children's cognitive outcomes.     

Real wages and the family: Adjusting real wages to changing demography in pre-modern England

This paper uses demographic data drawn from Wrigley et al.'s (1997) family reconstitutions of 26 English parishes to adjust Allen's (2001) real wages to the changing demography of early modern England. Using parity progression ratios (a fertility measure) and age specific mortality for children and parents, model families are predicted in two reference periods 1650–1700 and 1750–1800. These models yield two levels of interesting results. At the individual family level, we can measure how different families' real wages changed over the family life cycle as additional children were born. At the aggregate level, we can predict thousands of families using Monte Carlo simulation, creating a realistic distribution of median family real wages in the economy. There are two main findings. First, pregnancy and lactation do not create cyclical effects in the family's income. Instead, most families' welfare ratios decline steadily across the family life cycle until children begin to leave the household, increasing the welfare ratios. Second, Allen's real wages understate or match the median of the predicted demography-adjusted distributions.     

New “useless education theory”: Highly educated parents' expectations for their children's education—Evidence from the one-child policy

Using data from the China Family Panel Studies (CFPS) 2010 and a strictly implemented one-child policy as a quasi-experiment, this paper analyses the changes in parents' educational expectations of their children and the underlying mechanisms in a fuzzy regression discontinuity framework. It was found that one-child policy compliers have lower educational expectations for their children after acquiring an advanced education than those who did not. The finding remains valid after robustness analysis and placebo tests. Combined with an examination of the intergenerational effects of birth, this finding may be related to parents' assessment of and responses to educational returns and equality of educational opportunities. It was also found that parents with lower educational attainment in the high-income group have higher educational expectations than those with higher educational attainment, while for those with lower income, there is no significant difference between higher educational attainment and otherwise, which indirectly verifies the causal inference of this paper. The finding of this study explains the new “useless education theory” and provides a new perspective for understanding the intergenerational transmission of education.     

Did children's education matter? Family migration as a mechanism of human capital investment: evidence from nineteenth‐century Bohemia

This article analyses the rural–urban migration of families in the Bohemian region of Pilsen in 1900. Using a new 1,300‐family dataset from the 1900 population census, the role of children's education in rural–urban migration is examined. The findings indicate that families migrated to the city such that the educational attainment of their children would be maximized, and that there is a positive correlation between family migration and children being apprentices in urban areas. The results suggest that rural–urban migration was powered not only by the exploitation of rural–urban wage gaps but also by aspirations to engage in human capital investment.     

家庭规模、子女状况与农民工幸福感

为了考察农民工家庭规模、幸福感的关系,以及子女状况在其中的作用,基于2021年中国综合社会调查（CGSS）的微观数据进行实证分析。结果显示,家庭规模、子女状况、幸福感之间存在两两正相关关系;子女状况在家庭规模与幸福感之间起部分中介作用。因此,提高农民工幸福感可以从扩大农民工家庭规模,支持农民工家庭子女数量增加的角度入手,也为减轻社会老龄化造成的负担提供了有力支持。     

Patrilineality,fertility, and women's income: Evidence from family lineage in China

This study investigates how traditional patrilineal family institution influences women's income through fertility behavior by offering evidence from family lineage (zongzu) in China. We hypothesize that family with strong lineage—proxied by owning genealogy—has a negative effect on women's income through the son-targeting fertility behavior. Using a difference-in-differences strategy, this study confirms the hypothesis. Relative to the women whose first child is a son, the women marring into families owning genealogy indeed have more children and lower income, if their first child is a daughter. In contrast, such finding does not hold for the male sample. Preliminary evidence suggests that shorter work time can explain the findings.     

Family size,birth order and educational attainment: Evidence from China

Using Chinese Household Income Project survey data from 2013, this paper investigates the effects of family size and birth order on children's educational attainment. The endogeneity of family size is an important identification issue in the test of the quantity-quality tradeoff. We use variations in a mother's exposure to various phases of China's family planning policies by Hukou type, ethnicity and regional differences in fine rates as instruments to identify the causal effects of family size. We find that family size has a negative effect on children's education. Using family fixed effects model, we find a positive birth order effect. In addition, both the family size and birth order effects are more pronounced for families where first-born children are females than those where the first-borns are males. Birth order effect is more evident in financially constrained families.     

生育政策、子女数量与中国的性别教育平等

近年来,中国性别教育差距快速缩小并呈现出女性高等教育在校生比重超越男性的现象,文章从生育政策视角对这一现象进行了解释,认为计划生育政策通过改善女性教育获得显著促进了性别教育平等。队列分析显示,生育政策之后的出生队列中女性相对教育水平明显提高,性别教育差距明显缩小。基于生育政策地区差异和出生队列差异构建的双差分模型分析发现,以农村二孩政策地区为参照组,严格的独生子女政策在提高女性相对受教育机会方面更为明显。但相对于二孩政策,一孩半政策在促进性别教育平等方面不存在显著差异,这可能由于在一孩半政策下独女户和双女户数量较少,家庭受性别偏好影响会将资源向男性倾斜,导致政策没有通过控制家庭规模提高女性相对教育获得机会。研究认为,随着中国放松生育政策,农村地区由一孩半政策过渡到二孩政策并不会对女性教育获得产生明显影响,应该关注生育政策调整对严格独生子女政策地区女性教育获得的影响。同时,随着性别教育差距逐步缩小,可以利用劳动力市场政策降低市场性别歧视,进一步提高女性地位并促进性别平等。     

Do siblings take your food away? Using China's one-child policy to test for child quantity-quality trade-offs

We test for the existence of a trade-off between child quantity and child quality in Chinese families. We use changes over time and space in the local stringency of the one-child policy as a source of exogenous variation in family size. Investment in child quality is measured by intake of three nutrients, using seven waves of data from the China Health and Nutrition Survey. For all three nutrients a quantity-quality trade-off is apparent, which persists for fats if child-specific effects are introduced. The trade-off would be less apparent if exogenous sources of variation in family size were ignored.     

Impacts of publicly funded health insurance for adults on children's academic achievement

Publicly funded adult health insurance through the Affordable Care Act (ACA) has had positive effects on low-income adults. We examine whether the ACA's Medicaid expansions influenced child development and family functioning in low-income households. We use a difference-in-differences framework that exploits cross-state policy variation and focus on children in low-income families from a nationally representative, longitudinal sample followed from kindergarten to fifth grade. The ACA Medicaid expansions improved children's reading test scores by ~2% (0.04 SD). Potential mechanisms for these effects within families are more time spent reading at home, less parental help with homework, and eating dinner together. We find no effects for children's math test scores or socioemotional skill development.     

Sibling donation games: pure-altruism,strategic-altruism,and the interaction of familial and public transfers

Accompanying the rapidly aging populations of high-income countries are increasing transfers of time and money from adult children to elderly parents (ascending altruism). In this paper we first develop a theoretical model to characterize the general reaction-functions of two adult siblings choosing transfer amounts (possibly time) to their needy parents under two alternative motivations: pure altruism and strategic altruism. We show that transfers are strategic substitutes under pure altruism and strategic complements under strategic altruism. The Nash-equilibrium generates distinct predictions associated with each motivation and we then explore some implications of our findings. A result with potentially important policy implications is that the response of children transfers to increased pension payments to the parents depends on the children's motivations. This contrasts with much of the literature which assumes transfers decrease with increased pension payments.     

Wives’ Value of Time and Food Consumed Away from Home in Taiwan*

In the present paper, we examine the relationship between wives’ value of time and expenditures on food away from home (FAFH) in Taiwan between 1983 and 2000. An endogenous switching regression model is used to model the household's consumption decision on FAFH. The empirical results show that wives’ value of time, household income, presence of young children and grandparents, and wives’ educational attainment are important factors for both participation in consuming and amount spent on FAFH. The income elasticities of FAFH have increased from 0.09 to 0.17 over the sample period. Moreover, other things being equal, the level of spending on FAFH has also increased over time. The results suggest that there has been a structural change in the consumption pattern of FAFH by families in Taiwan.     

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

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 specifically focuses on migrant workers because they account for a significant 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 effect 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 effects.     

The impact of COVID-19 on employment and income of vocational graduates in China: Evidence from surveys in January and July 2020

The COVID-19 pandemic shocked the economy of China in early 2020. Strict lockdown measures were implemented nationwide to prevent the further spread of the virus. During the lockdown period, many economic activities were affected, which had repercussions for the nation's overall employment. Vocational graduates were among the most affected by the crisis. To estimate the causal effects of COVID-19 on the full-time employment of vocational high school graduates as well as their monthly income and hours worked by week, we exploit variations in the intensity of the pandemic in time and across space using survey data from vocational schools from six provinces in China. The results of the difference-in-differences (DID) estimates indicate that being located in counties with high pandemic intensity significantly reduced both the employment in full-time jobs of vocational graduates as well as their monthly income. Our study's analysis demonstrates that the effects of COVID-19 on the labor market can be attributed to the large-scale contraction of labor demand of the enterprises that were hiring vocational graduates. To cope with this situation, vocational graduates took various measures, including reducing consumption, drawing on their savings, searching for new jobs, taking on part-time jobs, borrowing money, and attending new training programs. In addition, the empirical analysis finds that there were heterogeneous effects with respect to gender, family social capital, the industry in which the vocational graduate was participating, and whether the individual was in a management position.     

Does wealth matter? An assessment of China's rural-urban migration on the education of left-behind children

This paper decomposes the impact of parental migration on the education of children left behind. In particular, we examine whether children are enrolled in school on a timely basis according to their age when their parents are away. We found both theoretical and empirical evidence to support that parental migration generates a strong positive impact on timely enrollment if a child is from a less wealthy background. However, the effect decreases with family wealth, and reverses after reaching a threshold; we find this point using family house size as our proxy and the turning point occurs at a moderate size of approximately 148 square meters. In addition, we find a compensating effect that migrants tend to spend more on a child's education investment to offset for the loss of parental time care. Lastly, we found the overall impact of parental migration is negative on the timely enrollment of child. Thus, with the important heterogeneities attributed to wealth, our results suggest that the left behind children of more affluent parents may be pushed into worse human capital outcomes; given the rapid development of China, it may be the case that the current cohort of left behind children is less likely to be enrolled in school than earlier cohorts.     

Assets and African Americans: Attempting to Capitalize on Hopes for Children Through College Savings Accounts

Although some racial inequalities have lessened in the half-century since the passage of the first major civil rights legislation, the racial wealth gap remains and in recent years seems to be widening. Households with children are the least likely to be asset secure or have sufficient resources to enable investment in opportunities for mobility. Viewing inequality from this perspective indicates that what households are able to save and invest for the future might have a more lasting impact on the life chances of children than their current income and consumption. Summarizing data from the Saving for Education, Entrepreneurship, and Downpayment (SEED) Initiative, a quasi-experimental study that is part of a national demonstration of Child Development Accounts (CDAs) in the United States, this paper describes how African-American households engage with one important investment opportunity - college savings accounts for their pre-school children. Combining account monitoring, survey, interview and focus group data, we explore the reasons that many households chose not to open accounts or invest their own money. We offer suggestions for making asset development programs viable for low-income African-American families and their children.     

Poverty and Other Determinants of Child Labor in Bangladesh

In this research we examine poverty and other determinants of child labor in Bangladesh. We define income quintiles as a means of measuring family poverty and add child and family characteristics to our model. We estimate the likelihood that a child will work, using separate logistic regression models for younger and older boys and girls in urban and rural areas. Our results support the notion that a family's poverty affects the probability that a child will work; keeping children away from work is a luxury these families cannot afford. Moreover, it is important to examine separate demographic groups in order to fully understand the determinants of child labor in Bangladesh since the effects of child and family variables on the probability that a child will work differ among these groups.     

Childhood health and sibling outcomes: Nurture Reinforcing nature during the 1918 influenza pandemic

This paper uses the 1918 influenza pandemic to test how household resources are reallocated in response to a health shock to one child. Using a new dataset linking census data on childhood household characteristics to adult outcomes from military enlistment records, I show that families with a child in utero during the pandemic shifted resources to the child's older siblings, leading to significantly higher educational attainments for these older siblings. These results suggest that the reallocation of household resources in response to a negative childhood health shock tended to reinforce rather than compensate for differences in endowments across children.