IDEAS home Printed from https://ideas.repec.org/p/bon/boncrc/crctr224_2025_760.html

The Dynamics of Fertility, Bargaining, and Human Capital Accumulation

Author

Listed:
  • Anning Xie

Abstract

This paper studies the role of intrahousehold bargaining in shaping women’s fertility decisions over the life cycle. I build and estimate a quantitative life-cycle model in which fertility is jointly determined by female labor supply and women’s bargaining power within the household under limited commitment, with endogenous marriage and divorce. A cen tral feature of the model is a dynamic feedback loop: childbirth lowers women’s wages and outside options, weakening their bargaining position and feeding back into subsequent fertility decisions. Exploiting the relaxation of fertility restrictions in China, I document empirically that couples with misaligned fertility preferences exhibit significantly smaller fertility responses and higher divorce rates than couples with aligned preferences. The es timated model replicates these reduced-form moments and further reveals the quantitative importance of limited-commitment frictions in depressing marriage incentives, generating inefficient divorce, and thereby suppressing fertility rates. Eliminating them raises com pleted fertility by 1.77% and marriage rates by 4.48%. Finally, the effectiveness of family policies depends critically on the degree of commitment within the household.

Suggested Citation

  • Anning Xie, 2026. "The Dynamics of Fertility, Bargaining, and Human Capital Accumulation," CRC TR 224 Discussion Paper Series crctr224_2025_760, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2025_760
    as

    Download full text from publisher

    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp760
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sun, Ang & Zhao, Yaohui, 2016. "Divorce, abortion, and the child sex ratio: The impact of divorce reform in China," Journal of Development Economics, Elsevier, vol. 120(C), pages 53-69.
    2. Mary Ann Bronson & Daniel Haanwinckel & Maurizio Mazzocco, 2024. "Taxation and Household Decisions: an Intertemporal Analysis," NBER Working Papers 32861, National Bureau of Economic Research, Inc.
    3. Wu, Xiaoyu, 2022. "Fertility and maternal labor supply: Evidence from the new two-child policies in urban China," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 584-598.
    4. Christine Ho & Yutao Wang, 2024. "Social Institutions and Low Birth Rates," Economics and Statistics Working Papers 11-2024, Singapore Management University, School of Economics.
    5. Wei Huang & Xiaoyan Lei & Ang Sun, 2021. "Fertility Restrictions and Life Cycle Outcomes: Evidence from the One-Child Policy in China," The Review of Economics and Statistics, MIT Press, vol. 103(4), pages 694-710, October.
    6. Katrine M. Jakobsen & Thomas H. Jorgensen & Hamish W. Low, 2025. "Fertility and Family Labor Supply," Working Paper Series WP 2025-26, Federal Reserve Bank of Chicago.
    7. Henrik Kleven & Camille Landais & Jakob Egholt Søgaard, 2019. "Children and Gender Inequality: Evidence from Denmark," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 181-209, October.
    8. Yuting Huang & Juan Pantano & Han Ye & Junjian Yi, 2023. "Property Division upon Divorce and Household Decisions," Journal of Human Resources, University of Wisconsin Press, vol. 58(2), pages 532-560.
    9. Rufei Guo & Junjian Yi & Junsen Zhang & Ning Zhang, 2025. "Rationed Fertility: Treatment Effect Heterogeneity in the Child Quantity-Quality Trade-Off," Journal of Political Economy, University of Chicago Press, vol. 133(10), pages 3349-3386.
    10. Zhou, Xiaoyao & Ye, Jingjing & Li, Hao & Yu, Hongyan, 2022. "The rising child penalty in China," China Economic Review, Elsevier, vol. 76(C).
    11. Haoran He & Sherry Xin Li & Yuling Han, 2023. "Labor Market Discrimination against Family Responsibilities: A Correspondence Study with Policy Change in China," Journal of Labor Economics, University of Chicago Press, vol. 41(2), pages 361-387.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dong, Yanfei & Li, Qingyuan, 2025. "Fertility policy and household labor supply: Evidence from China's Universal Two-Child Policy," Economic Modelling, Elsevier, vol. 153(C).
    2. Li, Keyang & Tang, Yixun & Wang, Qiuyi, 2025. "Impact of fertility relaxation on the housing market outcomes," Journal of Urban Economics, Elsevier, vol. 150(C).
    3. Yujie Wang & Run Ge & Wenjing Gao & Dunzhe Tang, 2024. "How Does Fertility Policy Relaxation Affect Household Financial Asset Allocation? Evidence from the Universal Two-Child Policy in China," Sustainability, MDPI, vol. 16(3), pages 1-23, January.
    4. Anqi LI & Shiko MARUYAMA & Yangyang ZHANG, 2026. "When the Last Big Arrow Was Loosed: How the One-Child Policy relaxations reshaped fertility trends in China," Discussion papers 26001, Research Institute of Economy, Trade and Industry (RIETI).
    5. Sun, Ang & Sun, Wei & Xiang, Wang & Zhang, Huili & Zhang, Junsen, 2026. "Narrowing or widening the gender gap in market and domestic work? The impact of workweek reduction reform in China," Journal of Development Economics, Elsevier, vol. 179(C).
    6. Nana Chen & Yi Min & Hangtian Xu & Shuhan Chen, 2025. "The differential effects of childbearing on household economic decisions: The contrast between the first and second child," Asian Economic Journal, East Asian Economic Association, vol. 39(1), pages 23-48, March.
    7. Chen, Zihao & Tian, Xu, 2025. "The relaxation of birth control policies adversely affects women's income: Evidence from China's universal two-child policy," China Economic Review, Elsevier, vol. 90(C).
    8. Shen, Yu & Qie, Xueting & Bi, Qingmiao, 2024. "Maternity leave reform and women's labor supply: Evidence from China," China Economic Review, Elsevier, vol. 87(C).
    9. Rao, Ziwei & Zhang, Yi, 2024. "Rely on children or work longer? The impact of fertility and child gender on old-age labor supply," World Development, Elsevier, vol. 181(C).
    10. Aguilar-Gomez, Sandra & Arceo-Gomez, Eva O. & De la Cruz Toledo, Elia, 2026. "Inside the black box of child penalties: Unpaid work and household structure," Journal of Development Economics, Elsevier, vol. 178(C).
    11. Krafft, Caroline, 2025. "Do employers discriminate against married women? Evidence from a field experiment in Egypt," Journal of Development Economics, Elsevier, vol. 174(C).
    12. Jiawen Liu & Xin Liu, 2026. "Spillover of Female Labor Protection: Evidence from China," Journal of Labor Research, Springer, vol. 47(1), pages 1-34, March.
    13. Changhong Li & Xianlang Liu, 2025. "The Dynamic Impact of Having a Second Child on Females' Workforce Participation: Evidence from China's Universal Two‐Child Policy," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 33(4), pages 1-34, July.
    14. Hanna Wang, 2025. "Fertility and Family Leave Policies in Germany: Optimal Policy Design in a Dynamic Framework," Working Papers 1507, Barcelona School of Economics.
    15. Jiani Gao & Min Sun Park & Solomon Polachek, 2026. "China's One-Child Exemptions and the Spousal Age Gap," RFBerlin Discussion Paper Series 26165, ROCKWOOL Foundation Berlin (RFBerlin).
    16. Zhang, Mingxue & Wang, Yue & Hou, Lingling, 2024. "Gender norms and the child penalty in China," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 277-291.
    17. Johannes Köckeis & Sven Stöwhase, 2026. "The Heterogeneous Impact of Children on Maternal Employment: Evidence From East and West Germany," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 34(2), pages 339-358, April.
    18. Huang, Chen & Jia, Ning, 2025. "Do policies reshape attitudes? Evidence from maternity leave expansion in China," China Economic Review, Elsevier, vol. 93(C).
    19. Liu, Hong & Li, Jiaying & Song, Hong & Zou, Xianqiang, 2024. "Unintended consequences of maternity leave entitlements on female labor market outcomes in China," Journal of Economic Behavior & Organization, Elsevier, vol. 228(C).
    20. Zhou, Xiaoyao & Ye, Jingjing & Li, Hao & Yu, Hongyan, 2022. "The rising child penalty in China," China Economic Review, Elsevier, vol. 76(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bon:boncrc:crctr224_2025_760. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CRC Office (email available below). General contact details of provider: https://www.crctr224.de .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.