Fertility and Sex Selection: Analysis and Policy in Asia

1
Fertility and Sex Selection Analysis and Policy
in Asia

• Institute of Population Research
• Peking University, Beijing
• November 17th, 2006

2
Overview

• Motivating Topic The Missing Girls of Asia
• Preview of Results
• Evidence of Sex Selection in Census Data
• Background on Fertility Policy in China
• Theoretical Model of Sex Selection Decision
• Empirical Results from Estimation of Model
• Policy Implications

3
Preview of Results

• Sex ratios in Asia are historically high due to
  sex selection following daughters
• Sex ratio in Asia is rising due to
• Declining allowed/desired fertility
• Persistent preference for at least 1 son
• Using Chinese data, I present and estimate a
  simple model of the sex selection decision. I
  find that a son is worth roughly 4 years of
  peasant income.
• Proposed subsidy to mothers who fail to ever have
  a son can reduce sex selection and out of plan
  fertility in rural areas.

4
Section 1The Case for Sex Selection
5
Chinese Births following Girls
One Child Policy
6
Declining Fertility, Rising Sex Ratio
Key Fact in China Number of Sons falls by 6
million. Number of Daughters falls by 16
million!
US ? No Change
7
In Asia mothers without a son more likely to have
a son In US, mothers without a daughter more
likely to have a son
8
In Asia mothers without a son MUCH more likely to
have a child In US, mothers without 1 of each
slightly more likely to have a child
9
Boys arrive Late
Fewer Female Births ? More Abortions/Infanticide
? Later Arriving Boys
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Section 2Background on Chinas Fertility Policy
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Fertility Policy in China

• Pronatalist Policy 1949-1969
• Two is Enough 1970-1979
• Strict One Child Policy 1979-1983
• Opening Small Holes, Close Large Ones 1984
• Today Federalism

12
Fertility Policy in China

• One Child Policy (35)
• Urban residents, population near cities
• 1.5 Child Policy (54)
• Rural areas in inner provinces
• Two Child Policy (10)
• Rural areas in outer provinces
• Three Child Policy (1)
• Residents in very remote areas

83 of Missing Girls
13
China One Size does not Fit All
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Enforcement of Policy
First, we employ reasoning and education. Then,
we order a pregnancy fine and forced abortion.
For persons with above-quota births, we mete out
fines for those with many births, we confiscate
land and revoke household registration.
Chinese 1995 Survey on birth control practices
Scharping 2003, p. 147
15
Fertility Fines in China
Source Scharping 2003
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Lower Fertility ? Higher Sex Ratios
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Low Fertility, High Sex Ratios
High Fertility, Low Sex Ratios
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More Education ? Lower Fertility ? Higher Sex
Ratios
First Births Similar, Undistorted
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Welfare Implications of Sex Selection

• Marriage market
• Among those who marry, women do relatively better
  and men do relatively worse. Men lose, women win.
• Increase in unmatched men. Men lose, women lose.
• 23 million boys will not find Chinese brides
• The guang gun Bare Branches
• It wont fix itself!
• Parents prefer an unmarried son to a married
  daughter.

Poston and Glover (2000)
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Policy Current Proposed in China

• Care for Girls campaign
• Outlawing sex selection
• Black Market for ultrasound
• 3. Raise fertility limits???

At best, slow process
Price is 6-40 - Cheap
Original Problem!
4. Social Insurance for those fail to have a son
Thought experiment. If sons provide a dollar
value ?, one could tax those with a son ½ of ?
and reward those with daughters with ½ of ?
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Section 4Sequential Model of a Mothers Decision
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Decision 1 Having a 2nd Child
Stop
G
G
Boy
Girl
Decision 2 Sex Selection
GB
G(G)
Abort
Decision 3 Having a 3rd Child
Stop
GG
GG
Boy
Girl
GGB
GG(G)
Decision 4 Sex Selection
Abort
GGG
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Features of the Model

• Mothers place a value of ? on a first-born son.
• Mothers want a son but face a fertility limit
• that is enforced by dollar fines F1 and F2
• for 1st and 2nd extra children. (2nd and 3rd
  Births)
• 3. Mothers have access to a sex selection
  technology that is 100 effective and costs A.
• 4. Mothers with a son never have another child.

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Decision 1 Having a 2nd Child
Stop
G
G
Boy
Girl
Decision 2 Sex Selection
GB
G(G)
Abort
Decision 3 Having a 3rd Child
Stop
GG
GG
Boy
Girl
GGB
GG(G)
Decision 4 Sex Selection
Abort
GGG
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4th Decision Abort or Stop

• Abortion Payoff
• Dont Abort Payoff

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Intuition of 4th Decision

• Abortion when value of a son is large relative
  to cost of abortion

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Decision 1 Having a 2nd Child
Stop
G
G
Boy
Girl
Decision 2 Sex Selection
GB
G(G)
Abort
Decision 3 Having a 3rd Child
Stop
GG
GG
Boy
Girl
GGB
GG(G)
Decision 4 Sex Selection
Abort
GGG
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3rd Decision Kid or Stop

• Have a kid
• Dont

Payoff of Abortion
Payoff of Stoppingexp(0)
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Intuition of 3rd Decision

• Have a kid when son preference is large relative
  to fine.
• Have a kid when payoff in round 4 is large, which
  happens when son preference exceeds abortion cost

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Decision 1 Having a 2nd Child
Stop
G
G
Boy
Girl
Decision 2 Sex Selection
GB
G(G)
Abort
Decision 3 Having a 3rd Child
Stop
GG
GG
Boy
Girl
GGB
GG(G)
Decision 4 Sex Selection
Abort
GGG
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2nd Decision Abort or Keep

• Abort
• Keep

Payoff of 3rd Kid
Payoff of Stoppingexp(0)
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Intuition of 2nd Decision

• Abort when ? A gtgt E(V3)
• E(V3) .51? F2 .49 E(V4)
• Abort if third fine is large!

Extreme case Mother will never die without son.
Now or Later scenario ? Abort when F2 gt .49A
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Decision 1 Having a 2nd Child
Stop
G
G
Boy
Girl
Decision 2 Sex Selection
GB
G(G)
Abort
Decision 3 Having a 3rd Child
Stop
GG
GG
Boy
Girl
GGB
GG(G)
Decision 4 Sex Selection
Abort
GGG
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1st Decision Kid or Quit

• Abort
• Keep

Payoff of 3rd Kid
Payoff of Stopping
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Heterogeneity
Maximum Likelihood Estimation Choose optimal
?1- ?5 given observed data
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Basic Intuition of the Model

• Abort 3rd Girl if Value of Son Exceeds Cost of
  Sex Selection (?gtA)
• Have 3rd Child if Value of Natural or Augmented
  chance of having a son exceeds the fine.
• Implication Those who wont abort more likely
  to stop.
• Abort 2nd Girl to Avoid a 3rd Child! Fine is
  expensive.
• Simple Case For mothers who know they will
  abort eventually, the decision is Now or
  Later.
• When the (3rd Child Fine gt 49 of Abortion
  cost),
• abort the second child.

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Section 5Empirical Calibration of the Model
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Question Is the fit good? Yes, reasonably good
in-sample forecasting.
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Question Who really wants a son in
China? Answer Less educated women, farmers.
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Policy Simulations

• Q What if you could reduce ? by subsidizing
  those who fail to have a daughter? How much would
  that cost?
• A A lot. But as I will show, it will accomplish
  the dual objective of lowering fertility and
  reducing the sex ratio.

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Smaller Deficit
Indirect cost
Direct cost
Declining Efficiency
Falling Fertility
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Summary of Findings

• Sex selection responsible for rising SR
• Declining fertility and son preference yield high
  Sex Ratio in Asia
• Need to address son preference among less
  educated and agricultural workers
• Only way to address dual concern of fertility
  rates and sex ratio is by reducing the demand for
  sons.

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THE END
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Acknowledgements

• Host Yukoun Hu
• Others Ron Lee, David Card, Bill Lavely, Danzhen
  You, Griffith Feeney, Feng Wang, Claudia
  Sitgraves, Ethan Jennings, Sanny Liao

THANK YOU FOR HAVING ME!!!