Fertility, parental investments and intergenerational mobility

This dissertation consists of three essays investigating how public policies affect parental decisions, children’s outcomes, and intergenerational mobility. The first essay uses China's family planning policies to quantify and explain spillovers in fertility decisions. We find that a woman’s fertility is influenced by the average fertility of other women in her reference group. Such fertility spillovers operate through both social and economic interactions. The second essay tests the child quality-quantity trade-off theory by analyzing how the family size and child outcomes change in response to changes in the cost of child quantity due to China’s One-Child Policy. I find that there exists a trade-off between family size and education only for high-skill workers' children. Farmers’ (resp. low-skill workers’) children own more land (resp. housing properties) rather than attain more education when they have fewer siblings. Such heterogeneity in the quality-quantity trade-off contributes to the decline of intergenerational income mobility in rural China. The third essay examines the role of water infrastructure in shaping parental investments and child health. Exploiting the gradual roll-out of water infrastructure in rural China, we find that exposure to treated tap water in utero increases height and improves various health outcomes in childhood. The effects are driven by a direct effect on early childhood health and magnified by an indirect effect on parental investments. The effects are stronger on children born to low-educated mothers, suggesting that public investments in treated tap water help reduce the transmission of parental disadvantages.