Fertility Policy Adjustments and Female Labor Supply

Abstract

Using microdata from the sixth census, we estimate the marginal treatment effect of fertility on female labor supply in rural China based on the generalized Roy Model. We find that the decline in childbearing willingness magnifies negative impact of fertility on female labor supply, particularly for women with higher educational attainment. In the context of the universal two‐child policy, the policy‐relevant treatment effects show that weekly labor supply falls by 7.5–12.3 hours after having a second child. Our research implies that female labor supply should be taken into consideration when introducing certain fertility incentive policies.