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

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  • Hongbin Li
  • Junsen Zhang

Abstract

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.

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  • 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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    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. 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.
    4. Pauline Rossi & Yun Xiao, 2020. "Spillovers in Childbearing Decisions and Fertility Transitions: Evidence from China," Tinbergen Institute Discussion Papers 20-031/V, Tinbergen Institute.
    5. 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.
    6. Ge, Suqin & Yang, Dennis Tao & Zhang, Junsen, 2018. "Population policies, demographic structural changes, and the Chinese household saving puzzle," European Economic Review, Elsevier, vol. 101(C), pages 181-209.
    7. 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.
    8. Taoran Chen & Zhibo Tan & Xiaobo Zhang, 2022. "Does female labor scarcity encourage innovation? Evidence from China's gender imbalance," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(2), pages 418-447, April.
    9. Peter Bönisch & Walter Hyll, 2023. "Television and fertility: evidence from a natural experiment," Empirical Economics, Springer, vol. 64(3), pages 1025-1066, March.
    10. Ding, Feng & Du, Limin & Shi, Jinchuan, 2020. "Lucky to have a sister: The effects of unmarried sister on brother outcomes in late imperial China," China Economic Review, Elsevier, vol. 64(C).
    11. Wang, Fei, 2012. "Family Planning Policy in China: Measurement and Impact on Fertility," MPRA Paper 42226, University Library of Munich, Germany.
    12. 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.
    13. Li, Wenchao & Yi, Junjian, 2015. "The Competitive Earning Incentive for Sons: Evidence from Migration in China," IZA Discussion Papers 9214, Institute of Labor Economics (IZA).
    14. 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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