Author: Xun Li , Yu Qiu 

Abstract

This paper examines the impacts of siblings on people's social preference, risk attitude and time preference with a data set from a large-scale lab experiment. Employing the variation of fine rates under One-Child Policy for excess birth in different regions as instrument to address the endogeneity of whether having siblings, we find that sibling's role mainly focuses on shaping people's social preference that subjects with siblings demand less as responders in ultimatum game and behave more cooperatively in sequential prisoner's dilemma. This conclusion survives through several robustness checks. Our further result suggests that more sibling interactions and less parental expectations are two potential mechanisms through which siblings play a role in making people more prosocial. Our findings point to a positive externality along with Two-Child Policy which is widely neglected in both policy evaluation and relevant theory such as quantity-quality theory, and provide implications for t he fertility policy such as the recent Three-Child Policy in China and beyond.

Executive summary:

This study explored the effects of sibling number on individuals' social preferences, risk preferences and time preferences through large-scale behavioral experiments. Using the rate of fines for over-birth families under the one-child policy as an instrumental variable, the results show that subjects with siblings are more accommodating in the ultimatum game and more cooperative in the sequential prisoner's dilemma. The reason for this is that children with siblings have more human interaction and less pressure from their parents' high expectations. These findings confirm the overlooked potential positive externalities of the two- and three-child policies—making children more prosocial.

This article was published online in China Economic Review 2021, Volume 69. The journal is a B+ award journal of the School of Economics and Management, and the authors are sorted alphabetically by surname.

The author Qiu Yu is a 17th-level undergraduate student in the Department of Mathematical Economics and Mathematical Finance.

Paper link: https://doi.org/10.1016/j.chieco.2021.101653