Working Paper: NBER ID: w26008
Authors: Ruixue Jia; Torsten Persson
Abstract: The same government policy that incentivizes individuals to make a certain choice can have different effects across groups due to the existence of social norms. In this paper, we study how Chinese ethnic policies that give material benefits to minorities affect ethnicity choices for children in ethnically mixed marriages. We document that, on average, such policies increase the propensity of choosing minority status for the children. Meanwhile, responses to the same policies differ widely across localities, suggesting that social norms may be important. We formalize the ethnic identity choice in a simple framework, which highlights the interaction of material benefits stemming from the ethnic policies, identity costs associated with breaking the norms of following the father's ethnicity, and social reputations altering the importance of identity costs. This framework predicts that ethnic policies should increase the propensity of breaking the norm (i.e., following the mother's ethnicity) in localities where more families follow the norm. We find support for this prediction in microdata from multiple census waves, and show that a number of alternative explanations can be ruled out. More broadly, our study serves as evidence about the interplay of individual and social motivates in shaping policy consequences, as well as evidence on the determinants of identity choice.
Keywords: identity choice; ethnic policies; China; social norms; material benefits
JEL Codes: D01; D02; H1; J1; J13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| introduction of ethnic policies providing material benefits (J15) | propensity for children in Han-minority families to adopt the minority ethnicity (J15) |
| prefectures with lower share of children following mother's ethnicity (J15) | larger effect of material benefits on propensity for children to adopt minority ethnicity (J15) |
| share of norm-breaking families (J12) | effects of material benefits on ethnic choices (J15) |