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Sunday, January 20, 2013

Gary Becker: Time for China’s One-Child Policy to Go



Around 1980, China adopted the “one child” policy, which meant in practice that urban families were limited to one child, while exceptions were made for some rural families, minorities, and others. This policy was enforced strictly in urban and many rural areas; some women were even forced to undergo abortions during the 6th or 7th months of their pregnancies. Whatever sense this policy made at the time-not enough sense, I believe, to justify such draconian measures- its continuation is imposing considerable harm on China.

During the 1950s and ‘60s, Chairman Mao Zedong was very much against government -enforced restrictions on births because he considered them to be Malthusian policies inspired by the West. This and other policies changed radically after Mao’s death and the overthrow of the Gang of Four. In the late 1970s, China started reforming its agriculture policies and other rigid centralized direction of the economy. Chinese political leaders at that time also believed that China’s then high birth rates would impede its economic development through requiring a considerable expenditure of its limited resources on feeding and schooling the many young children that result from high birth rates.

These beliefs about the harmful effects of high fertility overlooked the fact that other Asian countries and regions with much greater population densities than China, including Korea, Japan, and Taiwan, had managed rapid economic development out of high levels of poverty without forcing reductions in birth rates. Birth rates fell rapidly and naturally because of economic growth and rising education of women. These changes raised the cost of parental time that would be spent on raising many children. They also made parents desire fewer but much better educated children, so that their children could participate effectively in modern economies that place  great weight on worker skills.

Therefore, birth rates in China would have come down substantially even without its one-child policy as the extension of market reforms and other decentralizations of its economic policies pushed China toward rapid economic development and a much more urbanized economy. I do not believe that the one-child policy significantly increased China’s economic development, and it could even have retarded development, partly because reducing birth rates in an arbitrary fashion made many families very bitter.

China is only a middle-income country, and yet has a very low total fertility rate of between 1.4- 1.6 (this means that the average women is estimated to have between 1.4 and 1.6 children over her lifetime). This rate is far lower than that of the US (with a TFR of about 2.1), and is among the lowest in the world. Urban total fertility rates in China averages less than 1.0 since some urban women never have any children. This may well be the lowest urban fertility rate in any reasonably large country, although cities like Hong Kong And Macao also have total fertility rates below 1, and Singapore is only slightly above 1.

Whether or not my belief is correct that China’s one-child policy hindered, or at least did not encourage, China’s development after it instituted market reforms, the one-child policy did lead to prematurely low birth rates with several serious consequences. One results from the fact that China’s birth rate was forced down rapidly while most Chinese families maintained their traditional preference for sons over daughters.

In a society where families choose their number of births, they usually can satisfy their desire for sons by having several children if the first couple of children are girls (although not in Jane Austen’s Pride and Prejudice). Since the one-child policy put rigid ceilings on family size, families with strong son preferences tried to prevent that child from being a girl. Sometimes, first-born girls were abandoned or even allowed to die. More commonly, parents used modern ultrasound methods to determine early on in a pregnancy if a fetus was a girl. If it were, many women then had abortions so that they could continue to try to have a son as their only child.

The low birth rates in China due to the one-child policy also led to relatively few young adults and relatively many older persons at an earlier state of development than happened in the West and in other developing countries. China’s young adult population is falling rapidly. This made the traditional Chinese method of supporting older parents through help from children more difficult since parents are living longer and are having fewer children. In addition, an age structure with relatively few workers compared to the number of elderly persons makes it harder to implement traditional pay as you go methods of old age support that tax workers to finance benefits to the elderly. Moreover, as James Liang of Stanford has argued, fewer young adults tends to reduce innovation and risk-taking since younger adults are more likely to start businesses and take chances on new ideas.

Fortunately, a large-scale movement has now emerged in China to force the government to alter radically, if not entirely abandon, the one-child policy. Even with its total abandonment, I do not expect more than a 0.2 or 0.3 bump upwards in China’s total fertility rate. This is partly because many families would find it difficult to overturn habits of family formation built up during the one-child era. In addition, with China’s expected development toward an increasingly modern economy, most families will not want more than a couple of children, and many will have only one or even none.

Nevertheless, any adjustment upward in China’s fertility rate to more normal levels would be desirable, for it would remove the harshest effects of its one-child policy. In addition, freely determined fertility rates would correct the distorted sex ratio, and help China regain a more balanced age distribution that would encourage greater rates of innovation and better conditions for the elderly.

link:
http://www.becker-posner-blog.com/2012/07/time-for-chinas-one-child-policy-to-go-becker.html

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