The Impact of Relaxing Birth Control on Family Employment : Empirical Evidence and Explanation from China

This paper analyzes the impact of relaxing the One-Child Policy to the Two-Child Policy (TCP) on the employment of couples in China. By exploiting the regional variation in the timing of the policy implementation and the differences in exposure to the policy by subpopulation and by cohorts, we find that the relaxed birth control policy leads to a maximum decrease of 2 percentage points in the wife’s employment but no change in the husband’s employment. More importantly, the negative impact on female employment is realized through both supply-side and demand-side factors in the labor market, namely, mothers’ higher childcare costs from raising additional children and employers’ discrimination against fertile women