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Dr. Yi FAN
National University of Singapore

This study documents that China’s one-child policy (OCP), one of the most extreme forms of birth control in recorded history, has amplified economic inequality across generations in the country. Using nationally representative longitudinal household survey data and instrumental-variable estimation, we demonstrate that the declining fertility decreases intergenerational income mobility. Rural/poor Chinese families, whose fertility choices are less constrained by the OCP than those of urban/rich ones, have more children but invest less in their human capital. Since education is a major determinant of earnings, income inequality persists and increases across generations. Our results show that the OCP accounts for around one third of the decline in intergenerational income mobility in recent decades. The OCP has significant ramifications for Chinese society, not only intragenerationally but also intergenerationally.