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Abstract

The worldwide transition to low fertility rate has led to introduction of multiple interdisciplinary frameworks to understand its causes and consequences. Resolving the falling fertility rate has been one of China’s main challenges. Using the web-based survey data from a sample of 1,245 parents in Beijing, this study explores factors that affect the hypothetical decision of parents make when they consider whether to have an extra child. We will introduce a framework consists of 9 geographic variables - gender, age, number of siblings… - 5 indicator variables - attitude, sex preference, family support, financial burden, social norm - and test it using regression models. All indicators show a significant effect on parent’s intentions to have an extra child. Furthermore, participants were randomly split into three groups given different amount of hypothetical government subsidy. The second part of this study explore the effect of the hypothetical government subsidy on parents’ response in self-reported likelihood of having an extra child. I find that the 250 Yuan difference in monthly subsidy does not induce an increase in the self-reported likelihood of having an extra child. This could be explained by the fact that participants in this sample is a privileged group compared to both the average education level and annual family income in Beijing, so they are less likely to be motivated by monetary subsidy. It could also be the case that the cost of having an extra child in Beijing is so high that parents cannot be compensated by a 1000 Yuan monthly subsidy. Implications are analyzed in the context of recent government efforts to promote population growth.

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