How does the universal two-child policy affect fertility behavior?

Abstract

The Chinese government implemented the universal two-child policy on January 1 2016 to arrest the decline in the nation's birthrate and address the challenge of a rapidly aging population. We find that this policy significantly increased the possibility of having children and this effect was not attenuated from 2016 to 2018. This policy can explain 14.8% of the average number of newborns in 2016–2018. Our back-of-the-envelope calculation suggests that the three-child policy implemented in 2021 will bring additional 283.2 thousand newborns each year.

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