Jobs and Kids: Female Employment and Fertility in China

A woman who is not employed would prefer to have 1.768 children on average, while an employed woman would prefer 1.378 children. On average, a woman who is not employed has 1.650 children and an employed woman has 1.202 children. Therefore, formal employment reduces the preferred number of children by 0.35 and the actual number of children by 0.50.

• Formal employment for Chinese women reduces both preferred and actual fertility.
• Women from households with higher incomes are more likely to be employed than women from households with lower incomes.
• A woman with a bus stop near her house is more likely to be employed.
• Women with more schooling are more likely to be employed.
• Ethnic minority women are less likely to be employed.
• Employed women are more likely to be healthier and have health insurance.
• Employed women are more likely to have a son as their first child than are women who are not employed.

In short, the results suggest that formal employment for Chinese women reduces both preferred and actual fertility.

The Chinese Government has implemented controversial family planning policies, such as the “one-child” policy, in an effort to control the country’s population growth. The economic theory of household shows that fertility and job market behavior are interrelated choices. The authors compare the fertility preferences and actual fertility between employed and non-employed women, while controlling for endogeneity in employment.

Their analysis uses 2006 data from the China Health and Nutrition Survey (CHNS). CHNS data were collected from 11,739 respondents in 9 provinces which account for 44 percent of the Chinese population in 2007: Heilongjiang, Liaoning, Jiangsu, Shandong, Henan, Hubei, Hunan, Guangxi, and Guizhou. These 9 provinces vary substantially in geography, economic development, public resources, and health indicators. Because the study focuses on the fertility preferences of married women and uses actual fertility as a check, only respondents under age 52 in 2006 that were married, widowed, or divorced are included, resulting in a sample size of 2,355 adult female respondents. The sample represented all women with the potential to be in the formal labor force.

A major challenge in analyzing the effect of female employment on fertility is the reverse causal flow, which is the endogeneity of employment noted above. To overcome this endogeneity problem, the authors used an instrumental variable that increased access to employment opportunities – the availability of a bus stop in the residence community – to estimate female employment status.