China to allow couples to have three children

China announced on Monday that it intends to allow all married couples to have three children, in an effort to reverse the country’s declining birth rate and avert a population crisis. 

The move, reported in the New York Times, ends the two-child policy, introduced in 2016, which was failing to counter the effects of the one-child policy introduced from 1979.

Writing about the one-child policy (OCP) for IZA World of Labor, Wei Huang says: “Differing from birth control policies in many other countries, the OCP assigned a compulsory general ‘one-birth’ quota to each couple, though its implementation has varied considerably across regions for different ethnicities at different times. The policy affected millions of couples and lasted more than 30 years. According to the World Bank, the fertility rate in China dropped from 2.81 in 1979 to 1.51 in 2000. The reduced fertility rate is likely to have affected the Chinese labor market profoundly.” 

The announcement by the ruling Chinese Communist Party comes as the country finds its labor pool shrinking and its population aging, threatening its industrial strategy. “China is set to face major challenges in the coming decades due to its rapidly aging population. The high dependency ratio of retirees and very low birth rates may significantly inhibit future economic growth, and are sure to strain public finances,” say Junsen Zhang and Jia Wu, in their article on the Chinese labor market.

But, more couples have now embraced the concept that one child is enough, and some say they are not interested in having children at all. They are anxious about the rising cost of education and of supporting aging parents, made worse by the lack of day care and the pervasive culture of long work hours. So, the new three-child policy may still not be enough to counteract China’s demographic challenges.

The Party has indicated that it will also improve maternity leave and workplace protections, pledging to make it easier for couples to have more children. China’s single mothers still lack access to such benefits and protections.

Read Wei Huang’s IZA World of Labor article in full.

Learn more about the Chinese labor market.