Little Emperors in the Workplace: Labor Market Consequences of China's One-Child Policy

Abstract

What is the impact of China's One-Child Policy on the labor market outcomes of the only children that it engendered? This paper quantifies the wage income gap between only children and their peers (i.e. those with siblings), and uncovers the channels that underlie it. We find that only children receive no higher wage income than their peers, once differences in schooling attainment and family background are accounted for. In fact, we learn that the OCP resulted in an only child wage penalty, which may be due to only children possessing inferior socio-emotional attributes that are valued in the labor market. Our results deliver important insights for China as only children continue to dominate its labor force at a rapid pace.