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Eva Raiber, TSE Print
Friday, 09 March 2018, 12:15 - 13:15

ENTER Seminar

Eva Raiber, TSE

Expected Fertility and Educational Investment: Evidence from the One-Child Policy in China

Abstract: How does future expected fertility affect current educational investment? Theory suggests that expected fertility can impact both returns to education and the resources available for parental consumption. Using policy data about varying eligibility criteria for second child permits during the One-Child Policy in China, I investigate the effect of eligibility status on fertility and education. Between 1995 and 2005, second child permits increased the likelihood of having a second child by around 10 percentage points on average. Being allowed to have a second child increased schooling by around 0.8 years on average, an effect that is likely concentrated in the subset of individuals for whom the permit constraint is binding. This positive effect can be explained by the high cost of raising children and by the second child having only a short-term effect on parental labour supply.

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