Fertility, Child Gender, and Parental Migration Decision : Evidence from One Child Policy in China

Previous studies usually use child gender-related variables as instruments for fertility choices in households. However if the child gender directly affect the outcome variable other than changing the number of children, the exclusion restriction will be violated. We propose a new semi-parametric method to solve this identification difficulty in the context of China's One Child Policy. Applying to the children's effects on parental migration decision, we find that the addition of one girl in the family will result in a 13.7% increase in the probability that both parents in rural households migrate to urban areas; whereas the addition of one boy will result in a 24.3% increase in this probability. It implies that the reduction in the number of children will hinder parental migration. Comparing to the traditional instrumental variable method, we find that without considering the effect of child gender, the traditional IV estimate of the fertility effect will be heavily downward biased, which may lead to an opposite policy implication