Income Inequality and Fertility Behavior: An Empirical Study on China

Abstract

The declining trend in China’s fertility rate is very pronounced, and since 2023, the population has entered a phase of negative growth, significantly constraining economic development. At the same time, income inequality, which creates many problems, remains a serious issue. Existing research does not discuss the impact of income inequality on fertility rates in China currently. This paper depends on both macro and micro perspectives to examine the relationship between income inequality and fertility. We used the macro perspective to study the impact of urban-rural income inequality on the birth rate. The results show that the widening income gap between urban and rural areas will reduce the birth rate, but this effect declines with increasing of the birth rate; this negative effect is the strongest in the eastern region and the weakest in the western region. We used micro perspective to study the effect of the Gini coefficient on fertility motivation. It was found that for every one percent increase of the Gini coefficient, the fertility motivation decreased by about 0.08%, indicating that income inequality also impacts fertility behavior negatively. Comparing different income groups, income inequality has no impact on the fertility motivation of low-income groups, but has a significant negative and positive impact, respectively, on the middle and high-income groups. The mediating effect model shows that income inequality can negatively affect fertility behavior by reducing social trust and subjective well-being. Therefore, the empirical results from China suggest that income inequality negatively affects fertility behavior.