Fertility and maternal labor supply: Evidence from the new two-child policies in urban China

• We find number of children significantly increased after the implementation of the New Two-Child Policies in urban China. • Using the New Two-Child Policies as an exogenous variation in fertility, we find negative effect of number of children on maternal labor supply in both extensive and intensive margin. • By contrast, paternal labor force participation is not affected and fathers’ working hours are positively affected by number of children. The One-Child Policy which had been implemented for over 30 years in China was formally relaxed in 2010s. The New Two-Child Policies gradually allowed all couples to have two children. This paper investigates the impact of the New Two-Child Policies on individual behavior related to birth and maternal labor supply. We find number of children significantly increased after the implementation of the New Two-Child Policies. Using the New Two-Child Policies as an exogenous variation in fertility, we find negative effect of number of children on maternal labor supply in both extensive and intensive margin. Our results have important implications for the further relaxation of birth-control policies.