The Unexpected Consequences of the One-Child Policy in China

The One-Child Policy may have been very effective in taming the fast-rising population in China, with the figure expected to peak at 1.45 billion in 2030.[1] However, there are some side-effects that policymakers were unable to predict before the policy took effect. In this article, I will try and argue that the One-Child Policy may have contributed to the ever-rising inequality in China, and that the measurement of Gini coefficient is not sufficient in demonstrating its effect.

Definition, History and Theoretical Backing

Population in the first two decades in the history of the People’s Republic of China (PRC) grew tremendously as a result of high fertility and declining mortality. Despite the devastating economic and cultural disaster of the so-called “Great Leap Forward” and the Cultural Revolution, the population was nevertheless booming overall. By the late 1970s, the Chinese government under Deng Xiaoping issued a series of policies aiming to liberalise the Chinese economy, further boosting average income in order to sustain a higher fertility rate. Worried by the burgeoning population, the government initiated family-planning programmes, which then developed to be the most impactful and controversial demographic policy in the world, fearfully known as the One-Child Policy.


In 1978, the Chinese government officially declared its commitment to controlling population growth by amending the constitution, stating “the country implementing family planning programmes allows the population growth to cohere with economic and social development.” A couple is legally to have only one child, exceeding the limit would be subject to heavy fines, based on family income.

After WWII, many witnessed the rise of neo-Malthusian theories, among which was one of the most prominent advocators – Paul Ehrlich – who argued that, despite the fact that production forces had been liberated after the war, the world may not be able to feed all the people, as the population continued to grow. Ma Yinchu, the father of the One-Child Policy in China, had similar views. His arguments are founded on the basis that economic and social development is centrally planned and organised. Population size could be a source of power and production force, but no guarantee of better living standards. A large but uneducated population could equally be regarded as a burden to the economy. To balance population growth with capital accumulation, consumption patterns and technological improvement, he emphasized quality of population, referring to a skilled and educated labour force, which he argued can only be produced through birth control. His ideas were taken into perspective by the central government, which then gradually implemented policies accordingly.


Gini coefficient analysis

After the first generation passed away, the only child of the family could stand to inherit all the wealth one’s parents accumulated. The wealth that used to be owned by one’s parents is now precipitated down to one person. The amount that they are left with is double the value that either of his/her parents used to have. However, when a big number doubles, it turns into an even bigger number. Hypothetically, one could imagine a society entirely made up of two classes, with an upper class containing individuals who have each accumulated wealth of $10,000 and the other with a meagre $1,000. Given that their wealth holds constant over time, under the One-Child Policy the only child in a rich family is bequeathed with $20,000 with $10,000 from each one of his/her parents. Similarly, the child from a poor family is left with only $2,000. Intuitively one may argue that the inequality has widened, as the gap between the rich and poor individually has increased, from $9,000 to $18,000. Here, we only consider the flow of wealth between generations, without giving any regard to redistributive policies such taxes.





As demonstrated above, the Gini coefficient can only capture the mean of the distribution of d in the society at a particular point in time. However, one can easily imagine different distributions with the same mean. It could be further argued that the variance of d should be considered as well, as higher values of d, with more extreme values of wealth gaps, could indicate a more unequal society. The idea of analysing the full distribution of d sounds plausible and will be further discussed in future editions.


Remark

This edition of research looks into the potential issues of the One-Child Policy. By using the Gini coefficient, one may discover and reflect on its limitations in this particular case. In the following editions, other means of evaluating the problem will be demonstrated, for example by utilising second-hand data to analyse the real impact of the One-Child Policy with regards to inequality in China.


Junzhao Shi

SPONSORS

Platinum Sponsors

Gold Sponsors