Open Access Journal Article

The impact and mechanism of the relaxation of fertility policy on income distribution: Evidence from China's Selective Two Children Policy

by Qian Huang a ,  Shoulin Fang a,* ,  Dongmei Wang b ,  Weiheng Sun c orcid ,  Youcheng Zhou d orcid  and  Feiling Lu e orcid
a
School of Economics, Nankai University, Tianjin, China
b
School of Economics, Hebei University, Baoding, China
c
Business School, Imperial College London, London, UK
d
Department of Accounting, Southampton Business School, University of Southampton, Southampton, UK
e
College of Letters & Science-Economics Dept, University of Wisconsin-Madison, Madison, USA
*
Author to whom correspondence should be addressed.
JEA  2023, 19; 2(1), 19; https://doi.org/10.58567/jea02010006
Received: 9 February 2023 / Accepted: 10 March 2023 / Published Online: 15 March 2023
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Abstract

Numerous studies have explored the impact of family planning policies on income distribution, but the impact of policy relaxation remains largely unexplored. To address this gap, we investigate the effects of China's selective two-child policy, which was implemented in 2013, using provincial panel data from 2011 to 2016. Specifically, we employ a generalized difference-in-differences model to empirically analyze the impact and mechanism of the policy relaxation on residents' income distribution. Our findings are as follows. Firstly, the selective two-child policy has narrowed the income distribution gap. Secondly, male labor force participation, the urban-rural income gap, and disposable income serve as mechanisms through which the selective two-child policy affects income distribution. Thirdly, the robustness test confirms the robustness of our conclusions. Finally, we observe regional heterogeneity in the impact of the selective two-child policy on residents' income distribution. Specifically, the policy has had significant effects in the western and northeastern regions, but not in other regions. Overall, our results shed light on the impact of childbearing policies on income distribution, providing important insights for optimizing China's childbearing policies and promoting common prosperity.

Keywords: Selective two-child policy; Income distribution; Labor force participation, Income gap; Disposable income;
Copyright: © 2023 by Huang, Fang, Wang, Sun, Zhou and Lu. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
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ACS Style
Huang, Q.; Fang, S.; Wang, D.; Sun, W.; Zhou, Y.; Lu, F. The impact and mechanism of the relaxation of fertility policy on income distribution: Evidence from China's Selective Two Children Policy. Journal of Economic Analysis, 2023, 2, 19. https://doi.org/10.58567/jea02010006
AMA Style
Huang Q, Fang S, Wang D, Sun W, Zhou Y, Lu F. The impact and mechanism of the relaxation of fertility policy on income distribution: Evidence from China's Selective Two Children Policy. Journal of Economic Analysis; 2023, 2(1):19. https://doi.org/10.58567/jea02010006
Chicago/Turabian Style
Huang, Qian; Fang, Shoulin; Wang, Dongmei; Sun, Weiheng; Zhou, Youcheng; Lu, Feiling 2023. "The impact and mechanism of the relaxation of fertility policy on income distribution: Evidence from China's Selective Two Children Policy" Journal of Economic Analysis 2, no.1:19. https://doi.org/10.58567/jea02010006
APA style
Huang, Q., Fang, S., Wang, D., Sun, W., Zhou, Y., & Lu, F. (2023). The impact and mechanism of the relaxation of fertility policy on income distribution: Evidence from China's Selective Two Children Policy. Journal of Economic Analysis, 2(1), 19. https://doi.org/10.58567/jea02010006

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