Dragon Babies

Abstract

Using multiple sources of individual-level administrative data from the multicultural city-state of Singapore, we study the life outcomes of large birth cohorts created by the Chinese superstitious practice of zodiac birth timing, where parents prefer to give birth in the year of the Dragon. This practice is followed exclusively by the Chinese majority—between 1960 and 2007 the average number of births jumps by 9.7% in Dragon years among the Chinese majority, with no similar patterns detected among non-Chinese minorities. Chinese Dragon babies earn significantly lower income than other Chinese cohorts after entering the labor market (by 6.3%), relative to the income difference between Dragons and non-Dragons within the non-Chinese subpopulation. The adverse labor market outcome is not due to selection on family background; rather it reflects the aggregate resource implications of substantially larger cohort sizes. We find a significant negative income effect for the non-Chinese born in Dragon years, as well as for other birth cohorts who happen to enter the labor market at the same time as Chinese Dragons. The evidence suggests that the income effect partly arises from rather inelastic labor demand. Despite the government’s efforts to increase public educational resources, Dragon babies have lower applicant scores and admission chances to local national universities, suggesting limited capacity of such measures to accommodate the surge in demand for resources associated with larger birth cohorts.