Enforcing Government Policy: Privatization and the Weakening Effects of China's One-Child Policy

I evaluate the role of China’s privatization of the economy in affecting individuals’ fertility choices. State-owned enterprises or other state-owned organizations (SOEs) impose more control over individual choices than non-SOEs, and hence can perform a role in enforcing the one-child policy (OCP). Linear regressions, 2SLS using the father’s SOE status as an instrumental variable, difference-in-differences analysis using the introduction of the OCP as an exogenous shock all find a significantly and economically large negative impact of SOE status on fertility. Thus the OCP might already lead to a lower fertility without privatization, and more intensive control in SOEs rather than more intensive propaganda explains this.