China One Child Policy Essays

My dissertation focuses on the macroeconomic consequences of China's one-child policy. The first chapter examines the effects of China's one-child policy on savings and foreign reserve accumulation. Fertility control increases the saving rate both by altering saving decisions at the household level, and by altering the demographic composition of the population at the aggregate level. As in Song, Storesletten and Zilibotti (2011), government-owned firms are assumed to be less productive but have better access to the credit market compare to entrepreneurial firms. As labor switches from less productive to more productive firms, demand for domestic bank borrowing decreases. As saving increases while demand for loans decreases, domestic savings are invested abroad, generating a foreign surplus. In the second chapter of my dissertation, I provide a theoretical framework for examining the effects of China's one-child policy on its long run economic growth. The model incorporates within family intergenerational transfers and a "quantity/quality" tradeoff. When a population control policy is implemented, parents increase investment in their children's education in order to compensate for reduction in future transfers. As in Galor and Weil (2010), technological progress is assumed to be driven by two forces: the population size and the level of education. With population control, the total population decreases and the average level of education increases. Thus, the overall effect on technological progress is ambiguous without specifying functional forms for technology and human capital. The third chapter provides a quantitative exploration of the model from the second chapter. The calibrated results are consistent with the model, in which population, technological progress, and income per capita move in endogenous cycles. The impact of China's one-child policy depends on the timing of the policy. If the policy is enforced when the population is large enough, hence when the rate of technological progress is high, it increases GDP growth both in the short-run and in the long-run.

In the 21st century, the majority of problems that scourged humanity for centuries have been pacified by science and medicine. Diseases are being successfully cured; famine does not occur in the majority of developed countries; wars are no longer global. These, as well as other reasons, caused the extensive growth of population all over the world. One of the most overpopulated regions in the world is China, where the amount of people is close to 1.4 billion. In an attempt to avoid problems connected with overpopulation, the Chinese government in 1978 adopted the One-child Policy, which restricted each family to have more than one child (nowadays, exceptions are allowed due to reforms). However, although it helped to some extent, this policy also had a number of unforeseen consequences.

It is not clear which of the positive effects of the One-child Policy had been planned in advance, but one of them is the dramatic improvement of the financial status of many Chinese families. “Every family suddenly had a huge amount of discretionary income to invest in education and also in consumption,” says sociologist Vanessa Fong of Amherst College in Massachusetts. In past generations, resources were spread between many children; nowadays, families’ resources are concentrated on one child. As a result, Chinese parents can afford sending children to foreign colleges for studying, buy and consume more goods (thus moving the economy forward), and so on. As a result, China’s singletons, as they are called, are much more educated than generations before them (BBC).

At the same time, the implementation of the One-child Policy before reforms led to a number of horrifying violations of human rights all across China, and especially in rural regions. There were numerous stories about coercive practices of forced late-term abortions, when the community insisted on a woman being pregnant with a second child to get rid of it. There were reports about involuntary sterilizations; this was combined with the practice of whistleblowing, when people reported about their neighbors who dared to conceive a second child (Newsweek). Nowadays, the situation has improved due to a number of amendments made in this policy; but a couple of decades ago, the situation was much worse.

Yet another negative effect is the 4-2-1 problem. In China, a child takes care of his or her parents (and grandparents, if they are still alive) when they become an adult. In the times when there were many children in a family, this was not an issue; however, nowadays a grownup singleton must take care of two parents, and four grandparents—including financial support, health care, and so on. Considering that by 2050, the amount of senior citizens (65 years old or older) are expected to be more than a quarter of the whole population of China, it is not hard to imagine the excessive burden of family responsibilities that each singleton will have to face (IO9).

The notorious Chinese One-child Policy has lead to a number of controversial effects. On one side, modern Chinese young men and women (born after 1978) are more educated than previous generations, as families can focus all their incomes on one child; also, the rates of consumption of various goods have increased. At the same time, the process of this policy’s implementation was accompanied with horrible violations of human rights, which stopped only with reforms and amendments to the policy. Also, children born under the policy will have to face an excessive burden of taking care after old parents and relatives—all on their own.

References

Hatton, Celia. “No Siblings: A Side-effect of China’s One-child Policy.” BBC News. N.p., 22 Nov. 2013. Web. 14 Apr. 2015.

Scutti, Susan. “One-Child Policy is One Big Problem for China.” Newsweek. N.p., 23 Jan. 2014. Web. 14 Apr. 2015.

“The Unintended Consequences of China’s One-child Policy.” IO9. N.p., n.d. Web. 14 Apr. 2015.

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