Trade liberalization and gender dynamics: The impact of policy uncertainty on sex ratios at birth in China

This paper investigates how trade liberalization affects gender imbalance at birth in China. By combining Census data with household and firm survey data as well as regional data and employing the linear probability difference-in-differences method, we provide evidence for the pivotal role of declining trade policy uncertainty in reducing the sex ratio at birth in China since the establishment of permanent normal trade relations between China and the United States in 2002. Our results show that a one standard deviation decline in trade policy uncertainty leads to a decline of 11.7% in the sex ratio of second births when the first child is a girl in rural households in China. This decline accounts for approximately 60% of the overall reduction in the sex ratio for this type of birth during this period, a period prior to the ease of China’s one-child policy. More importantly, further analyses reveal that enhanced female bargaining power and cultural diffusion are two critical mechanisms. Our research fills an important gap in the literature by providing a perspective to the understanding of the alleviation of gender imbalance, and our findings have direct relevance for international trade governance and national population policies.