Why is the Sex Ratio Unbalanced in China? The Roles of the One-Child Policy, Underdeveloped Social Insurance, and Parental Expectations

Xue Li, University of Maryland

Using a calibrated life-cycle model, this paper examines the rising sex ratio in China through three linked but different perspectives: one-child policy, social insurance, and parental expectation. The benchmark calibration demonstrates that moving to a one-and-half-child policy would dramatically decrease the sex ratio at birth; if parents take the "can-not-marry" risk into consideration, the sex ratio will drop significantly with negligible change in population growth; and a universal social insurance only causes a small change in the sex ratio. I also investigate the equilibrium sex ratio, suggesting that publicity and education could help alleviate the sex imbalance. Similarly, I consider endogenizing children's transfer to parents and find that the equilibrium level is positively related to the attention parents place on grandparents' welfare. Finally, I show that if social insurance could change the social attitude on expected child transfer, then it has the potential to significantly reduce the sex ratio.

  See paper

Presented in Session 187: Public Policy and Families in Developing Countries