No more children, please

Some of you might not be familiar with China's one-child policy. Adopted in 1979 it is an attempt by the Chinese government to reduce both urban and rural fertility rates by legally restricting the amount of children a couple can have. It is most effective in China's cities, as in the rural areas, couples are often allowed to have a second child after a number of years.

China has good intentions, as curbing population growth in a country with over a billion citizens is incredibly important. However, their enforcement of such a policy has had a variety of negative repercussions on the Chinese population.

This BBC News Article by Francis Markus, which I've been meaning to link for quite some time now, highlights some of the more recent problems:

""Nowadays many rural families don't want to send their children to work in the factories because they have only have one child and they regard that child as their insurance policy for old age," said Feng Shengping, senior researcher at a Communist Party think tank in southern China. "

While some economists and demographers would argue that old-age security isn't an important factor in fertility decisions, others, including yours truly, believe that it is one of the most important incentives for having large families in developing countries. In the absence of a proper pension system (China has one, but usually fails to deliver), parents will optimize their fertility in order to improve their chances of having a surviving child (preferably a son) to take care of them.

In the absence of a proper pay-as-you-go pension system and with an upper bound on fertility, it is hardly surprising that families do not want to let go of the few children they have, as it is of the utmost importance that the child does not default on his/her responsibilities. There are a few benefits to this situation: this creates incentives for parents to invest heavily in child quality, often seen as a staple of demographic transition.

However, the negatives far outweigh the positives. As would be expected, a son is far more useful to a family than a daughter, so many daughters are aborted or removed through infanticide in order to make room for more men. As a result, the sex ratio in China has taken a drastic turn (with numbers as high as 117 men for every 100 women).

It might also be noted that population growth is not always a bad thing. The growth of dependency-aged populations (children and seniors) usually has a negative effect on a country's economy, as neither group actually produces anything, and instead only consumes. Early on in demographic transition, as child mortality falls, we usually see youth dependency rates skyrocket, as suddenly we have a lot of children being born.

China's policy, the in face of lower child mortality rates, is now hurting the growth rate of China's working population, which is much more essential to economic growth. At the same time, the restriction is inflating average age, so as China's population gets older and older, they are finding less and less children to be there for them.

A little bit of population growth, like inflation, is good for an economy. Let's hope that China comes around before they wind up with a large dependent senior population before they've moved from being a developing country to a developed one.