Overeducation and fertility decisions

Purpose Extensive research highlights the substantial impact of overeducation on labor market outcomes. However, few studies explore its effects beyond the labor market. This paper examines whether and how overeducation influences fertility. Design/methodology/approach First, we propose two theoretical hypotheses based on existing literature and develop an overlapping generations model incorporating overeducation and educational attainment, with conclusions aligning with the hypotheses. Second, using data from the China Family Panel Studies, we empirically test the impact of overeducation on fertility and its underlying mechanisms. This paper employs the Heckman correction model and IV method and conducts subsample analyses to confirm the findings. Findings Overeducated individuals exhibit significantly lower fertility, primarily mediated by reduced income and increased work time. Notably, the negative effect of overeducation on fertility is more pronounced among highly educated groups. Practical implications Addressing overeducation could mitigate the adverse impact of overall improvement in national education levels on fertility. Policies aimed at improving employment quality for highly educated groups may indirectly support fertility. Originality/value As one of the few studies linking overeducation to non-labor market outcomes, we provide evidence of its negative causal effect on fertility.