How does digital finance impact birth rates: Evidence from China
Junshi Chen  1@  , Jing Chi  2@  , David Smith  2@  , Mui Kuen Yuen  2@  
1 : Massey University
2 : Massey University

Digital finance, the integration of tradition financial services and new information technology, has been shown to have various impacts in society. However, how this new financial technology affects people's fertility behavior is still under investigation and worth exploring from the point of view of long term strategical national interests. By employing a digital finance index and publicly available city-level birth rates in 287 Chinese cities, we find that digital finance has a negative influence on birth rates; this finding is supported by endogeneity and robustness tests. We suggest digital finance increases investment opportunities and therefore reduces the need of having children for support in old age. Digital finance increases consumption and possibly individualism and also increases women's economic independence and their opportunity cost of having children, leading to lower birth rates. Given the development of digital finance is an inevitable trend, we further find that out of the three components of digital finance index measures, the coverage of digital finance significantly decreases birth rates, while the higher level of digital finance development -- depth and digitalization of the technology, have much less negative impact on birth rates. Finally, this negative impact can be moderated when governments make policy efforts to increase people's fertility willingness through increased educational and medical resources and protection of religion.


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