Fertility Policy Adjustments and Female Labor Supply: Estimation of Marginal Treatment Effect Using Chinese Census Data

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 leads to an increasing 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 policyrelevant treatment effects shows 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 certain fertility incentive policies are introduced.