The air pollution-fertility relationship: evidence from China

Abstract

ABSTRACT This study investigates the link between air pollution and fertility. We developed a theoretical model of fertility choice in which air pollution affects both reproductive capacity and fertility intention. The model predicts that air pollution decreases fertility and that the negative effect of air pollution on the fertility rate varies across regions with different fertility restrictions and intentions. We use panel data from Chinese cities to empirically investigate the impact of air pollution on fertility and address the potential endogeneity problem by employing three identification strategies: fixed effects, lagged dependent variables, and instrumental variables. The point estimate implies that a one-standard-deviation increase in the 5-year average PM2.5 exposure (18 µg/m3) leads to a 0.417-standard-deviation decrease in the birth rate (1.19‰). Moreover, the negative effect of air pollution on fertility is weaker when the one-child policy is relaxed and is stronger in regions with higher education levels and higher housing prices, suggesting that air pollution decreases fertility through both the biological channel and the intention channel.