Bequest to and marriage of children can lead to a Pareto-inefficient allocation. The inefficiency (or market failure) arises because one family, making a bequest to its own child, ignores the contribution to the utility of the other family whose child enters the marriage. This note shows that an assortative mating rule based on bequests can improve or even restore Pareto efficiency when parents take account of the rule in deciding the amount of bequests to their own children.

After China’s recent great success in eliminating absolute poverty, addressing relative income inequality becomes a more important issue. This survey finds that income inequality rapidly increased in the first three decades since 1978 but stabilized and slightly declined in the past decade, consistent with the well-known Kuznets hypothesis. In addition to documenting the trend and patterns over time and across groups and regions, seven sources of income inequality are systematically discussed with an effort to reconcile and extend the existing literature. Furthermore, a negative correlation is documented between income inequality and intergenerational mobility, consistent with the Great Gatsby curve observed in developed countries.

Bequest to and marriage of children can lead to a Pareto-inefficient allocation. The inefficiency (or market failure) arises because one family, making a bequest to its own child, ignores the contribution to the utility of the other family whose child enters the marriage. This note shows that an assortative mating rule based on bequests can improve or even restore Pareto efficiency when parents take account of the rule in deciding the amount of bequests to their own children.

Becker attributes the existence of marital transfers to inflexibility in the division of joint product within the marriage. If that were the only reason, we would not have observed the coexistence of dowries and bride‐prices. This paper offers an alternative analysis. While Becker's interpretation is retained for bride‐prices, a dowry is now represented as a premortem bequest by altruistic parents for a daughter. It not only increases the wealth of the new conjugal household but also enhances the bargaining power of the bride in the allocation of the output within the household, thereby safeguarding here welfare. Using micro data from Taiwan, we found that a dowry improves the bride's welfare whereas a bride‐price has no effect. These empirical results support the theoretical predictions of the model.

This paper is based on the idea that for each partner in a marriage, there are two distinct types of leisure. One type is each person’s independent (or private) leisure, and the other type is spousal leisure, whose importance has long been emphasized in the literature of psychology. While each type of leisure is unobservable (only total leisure is observed), it is shown that the recent collective models of the intrahousehold allocation initiated by Chiappori can be extended to identify each type of leisure up to an additive constant. In particular, the effects of each member’s wage, household unearned income, and extrahousehold environmental parameters on the independent and spousal leisure and on the sharing rule are fully identified. The observational requirement here is the same as in other studies, namely, the observation of individual labor supply, individual wages, household unearned income, one assignable good, and consumption expenditure at the household level.

In this paper, we address the issues of whether reductions in fertility increase human capital investments per child and whether twinning can identify the quantity—quality (Q-Q) trade-off. We show that estimates of the effects of twinning at higher parities on the outcomes of older children in prior studies do not identify family-size effects but are confounded by inter-child allocation effects because of the endowment deficit and close spacing of twins. However, examining the effects of twinning by birth order, net of the effects stemming from the endowment deficit of twins, can provide upper and lower bounds on the trade-off between the family size and average child quality. Our estimates, based on data from China, indicate that an extra child at parity one or at parity two, net of one component of birth-endowment effects associated with birth weight, significantly decreases the schooling progress, the expected college enrolment, grades in school and the assessed health of all children in the family. Despite the evident significant trade-off between number of children and child quality in China, the findings suggest that the contribution of the one-child policy in China to the development of its human capital was modest.

This paper examines the impact of the birth rate on economic growth by using a panel data set of 28 provinces in China over twenty years. Because China's one-child policy applied only to the Han Chinese but not to minorities, this unique affirmative policy allows us to use the proportion of minorities in a province as an instrumental variable to identify the causal effect of the birth rate on economic growth. We find that the birth rate has a negative impact on economic growth. The finding not only supports the view of Malthus, but also suggests that China's birth control policy is indeed growth enhancing.

Spousal education is correlated with earnings for two reasons: cross‐productivity between couples and assortative mating. This article empirically disentangles the two effects by using Chinese twins data. We have two innovations: using twins data to control for the unobserved mating effect in our estimations and estimating both current and wedding‐time earnings equations. We find that both crossproductivity and mating are important in explaining the current earnings. Although the mating effect exists for both husbands and wives, the cross‐productivity effect mainly runs from Chinese husbands to wives. Our findings shed light on the theories of human capital, marriage, and the family.

This study investigates the effects of unobserved earnings-related endowments on marital outcomes, focusing on potential gender differences. Using a less stringent, more plausible assumption that monozygotic twins share more similar endowments relative to dizygotic twins, we develop a novel identification strategy from the twins experiment. Using unique Chinese twins survey data, we find that men with genetic endowments related to higher earnings marry earlier and have younger, taller wives; such women marry later and have older husbands with higher education and income. Results cast doubt on the conventional assumption of independence between unobservables and observable marital attributes.