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Testing the External Effect of Household Behavior: The Case of the Demand for Children


  • Hongbin Li
  • Junsen Zhang


This paper tests the external effect of household childbearing behavior by drawing on microfertility data from China. The test is executed by regressing one woman’s fertility on the average fertility of neighboring women. China’s unique affirmative birth control policy provides us with quasi-experimental fertility variation that facilities identification. We present two identification methods: (1) Testing the external effect from the dominant Han Chinese on minority women by using the fertility fine as an instrumental variable; and (2) identifying the external effect using an instrumental variable that is based on the difference-in-differences. We find that fertility has a large external effect.

Suggested Citation

  • Hongbin Li & Junsen Zhang, 2009. "Testing the External Effect of Household Behavior: The Case of the Demand for Children," Journal of Human Resources, University of Wisconsin Press, vol. 44(4).
  • Handle: RePEc:uwp:jhriss:v:44:y:2009:i4:p890-915

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    References listed on IDEAS

    1. Russell Cooper & Andrew John, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, Oxford University Press, vol. 103(3), pages 441-463.
    2. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-877, October.
    3. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 531-542.
    4. Bruce Sacerdote, 2001. "Peer Effects with Random Assignment: Results for Dartmouth Roommates," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 681-704.
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    Cited by:

    1. Xiaoyu Wu & Lixing Li, 2012. "Family size and maternal health: evidence from the One-Child policy in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1341-1364, October.
    2. Peter Bönisch & Walter Hyll, 2015. "Television Role Models and Fertility: Evidence from a Natural Experiment," SOEPpapers on Multidisciplinary Panel Data Research 752, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Hongbin Li & Junjian Yi & Junsen Zhang, 2011. "Estimating the Effect of the One-Child Policy on the Sex Ratio Imbalance in China: Identification Based on the Difference-in-Differences," Demography, Springer;Population Association of America (PAA), vol. 48(4), pages 1535-1557, November.
    4. Hai Fang & Karen Eggleston & John Rizzo & Richard Zeckhauser, 2013. "Jobs and kids: female employment and fertility in China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-25, December.
    5. Wang, Fei, 2012. "Family Planning Policy in China: Measurement and Impact on Fertility," MPRA Paper 42226, University Library of Munich, Germany.
    6. Ren, Weiwei & Rammohan, Anu & Wu, Yanrui, 2014. "Is there a gender gap in child nutritional outcomes in rural China?," China Economic Review, Elsevier, vol. 31(C), pages 145-155.
    7. Hai Fang & Karen N. Eggleston & John A. Rizzo & Richard J. Zeckhauser, 2010. "Jobs and Kids: Female Employment and Fertility in Rural China," NBER Working Papers 15886, National Bureau of Economic Research, Inc.
    8. Ge, Suqin & Yang, Dennis T. & Zhang, Junsen, 2012. "Population Policies, Demographic Structural Changes, and the Chinese Household Saving Puzzle," IZA Discussion Papers 7026, Institute for the Study of Labor (IZA).
    9. repec:eee:eecrev:v:101:y:2018:i:c:p:181-209 is not listed on IDEAS
    10. Fang, Hai & Eggleston, Karen N. & Rizzo, John A. & Zeckhauser, Richard Jay, 2010. "Female Employment and Fertility in Rural China," Scholarly Articles 4449097, Harvard Kennedy School of Government.

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