Working Paper: NBER ID: w19661
Authors: Carol H. Shiue
Abstract: A stylized fact of modern growth is that as countries become richer, education levels rise while family size decreases. This paper provides evidence that well before the onset of modern growth, changes in the return to education affected household choice of children's quantity versus quality. The setting is in Anhui Province, China over the 13th to 20th centuries. I show that the civil service examination system underwent long-term changes affecting the return to education, providing a means to test whether incentives for acquiring education affected fertility decisions. Employing an intergenerationally-linked dataset drawn from over 43,000 individuals, I first show that as the state examination’s discretionary practices had been largely eliminated by the 17th century, increasing the return to education, households with a lower number of children had a higher chance that one of their sons would substantially invest into human capital. Second, I demonstrate that this negative relationship between fertility and education disappeared with a fall in the return to education due to the deterioration of the state examination system in the 19th century. Taken together, my findings provide support for the hypothesis that fertility choices respond to changes in the return to human capital. The implications of these findings for theories of economic development are discussed.
Keywords: Human Capital; Fertility; Civil Service Examinations; China
JEL Codes: I25; J11; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| robust negative relationship between education and fertility (J19) | households with fewer children more likely to invest in their sons' education (D14) |
| decline in the return to education in the 19th century (I26) | negative relationship between education and fertility disappears (J19) |
| intergenerational transmission of human capital (J24) | trade-off between child quantity and quality (J13) |
| increase in the return to education by the 17th century (I26) | robust negative relationship between education and fertility (J19) |
| reduced fertility (J13) | higher educational investments (I26) |