China’s one-child policy, meant to control population growth, had an unexpected effect: it boosted female entrepreneurship. A University of Michigan study found that stricter enforcement of the policy led more women to start businesses, adding a new angle to discussions about its economic impact.
Previous research has shown that lower birth rates lead to more women joining the workforce. This study goes further, showing that fewer children also pushed women toward self-employment. Using data from the China Health and Nutrition Survey and business registries, researchers found that when provinces imposed higher fines for extra children, female entrepreneurship rose by 3.8 percentage points—a 40.9% increase over the baseline rate of 9.3%. The effect was strongest among urban women aged 20-40 and those who already had children.
Freeing up time
By limiting family size, the policy freed up time for women. Each extra child added 9.17 hours of childcare and 4.36 hours of housework per week, duties that mostly fell on women. With fewer children, many redirected their time toward jobs or starting businesses.
The study challenges the idea that these women became entrepreneurs out of desperation. It found no sign that female-led businesses under the policy were temporary or low-quality. Women who started businesses earned and spent more than those who took traditional jobs. Their companies were just as likely to be incorporated and to survive as those run by women outside the policy’s influence.
Urban women saw the biggest increase in entrepreneurship, likely because the policy was stricter and they had more access to business opportunities. Educated women, in particular, seemed to view entrepreneurship as a career move. In rural areas, where some families could have a second child if the first was a girl, the effect was smaller.
Unintended consequences
The study adds to debates on how birth control policies affect economies. Though the one-child policy ended in 2015, its long-term effects are still unfolding. Now that China faces an aging workforce and falling birth rates, policymakers may learn from its unintended outcomes.
However, the study does not endorse the policy. While it may have encouraged female entrepreneurship, its broader social and demographic costs were severe. As countries deal with shifting demographics, the link between birth rates and economic activity deserves more attention.
