This paper studies the effects of vehicle ownership restrictions on fertility. We examine Beijing’s license plate lottery system, which began in 2011 and restricts the number of new and used vehicles people can obtain. Leveraging a randomized survey, we show that one unintended consequence of the vehicle restrictions has been to reduce the number of births in the households of lottery entrants between 2011 and 2014. The vehicle restrictions reduce births in households of lottery participants by 35 percent, implying a remarkable 6 percent reduction in births across the entire city. We report changes in household structure and age composition consistent with this change in births.
- Declining fertility rates have been a major policy issue for developing countries, such as China in the wake of its one-child policy.
- Beginning in 2011, Beijing’s vehicle license plate lottery system restricts vehicle ownership, to reduce traffic congestion and air pollution.
- Vehicle ownership can increase or decrease fertility by influencing childcare costs, disposable income, and other factors.
- The vehicle restrictions reduce births in households of lottery participants by 35 percent, translating to a 6 percent reduction in births across the entire city.
- Changes in household structure and age composition are consistent with this change in births.