We incorporate pollution exposure into Becker’s “Quantity-Quality” (Q-Q) model of fertility and quantify how air pollution distorts individuals’ fertility behaviors in China. We document a robust pattern in which increased pollution over time negatively affects the fertility of ethnic Han people, who comprise approximately 92% of the Chinese population. These patterns are evident in both cross-sectional and panel data, when instrumenting for pollution using distant coal-fired plants upwind of cities or thermal inversions that trap pollution. Consistent with the stylized Q-Q model of fertility, we find that increased pollution drives up the parental expenditure per child, which increases the shadow price associated with the number of children and reduces fertility. Consistent with the model, we also find that the fertility choices of people who tend to have higher demand for child quality are significantly more sensitive to pollution changes. Pollution does not have a meaningful effect on the fertility of ethnic minorities, which can also be explained under the Q-Q framework.
Authors
- Acknowledgements & Disclosure
- Xuwen Gao, Peking University HSBC Business School, Shenzhen 510632, China, Email: gaoxw@phbs.pku.edu.cn. Ran Song, Yale-NUS College, National University of Singapore, 138527, Singapore, Email: yncrans@nus.edu.sg. Christopher Timmins, 213 Social Sciences, PO Box 90097, Department of Economics, Duke University, Durham 27708, United States, Email: christopher.timmins@duke.edu. (Corresponding Author). All remaining errors and omissions are our own. Declarations of interest: None. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- DOI
- https://doi.org/10.3386/w30165
- Published in
- United States of America
