Hongbin Li and Junsen Zhang.pdfVIP

DO HIGH BIRTH RATES HAMPER ECONOMIC GROWTH? Hongbin Li and Junsen Zhang* Abstract—This paper examines the impact of the birth rate on economic stated in a more recent survey paper by Temple (1999), the growth by using a panel data set of 28 provinces in China over twenty new empirical growth literature has done little to modify the years. Because China’s one-child policy applied only to the Han Chinese but not to minorities, this unique affirmative policy allows us to use the conclusions made by Kelley. proportion of minorities in a province as an instrumental variable to The lack of a conclusion is in part due to the difficulty in identify the causal effect of the birth rate on economic growth. We find that the birth rate has a negative impact on economic growth. The finding identifying a causal effect of population growth or birth rate not only supports the view of Malthus, but also suggests that China’s birth on economic growth. A simple growth regression cannot control policy is indeed growth enhancing. prove causality because population growth or birth rate in the growth regression might be endogenous. One source of I. Introduction endogeneity is simultaneity or the feedback effect. Eco- nomic growth can affect fertility because with more income, HE relationship between population and economic growth parental human capital improves and thus raises the return Thas been subject to debate for hundreds of years.1 The to investment in the human capital of children relative to most influential school of thought, or the Malthusian sch