Widening income inequality and the decline in fertility intentions: Micro evidence from Chinese households

The persistent decline in global fertility rates poses a critical demographic challenge, and widening income inequality is increasingly recognized as a structural impediment to reproductive decision-making. Drawing on nationally representative micro-level panel data from China, this study examines the causal effect of household income inequality on fertility intentions and the mechanisms underlying this relationship. Using a rigorous identification strategy, we find that broader inter-household disparities significantly reduce fertility intentions; the results are robust to extensive checks and endogeneity corrections. Heterogeneity analyses show stronger effects among households with older average spousal age, prior fertility experience, and lower wealth. Mechanism tests identify rising child-rearing costs and declining expectations of upward mobility as key channels linking inequality to lower fertility intentions. We also document that intra-household income inequality exerts an independent negative influence, whereas greater engagement in digital social and entertainment activities partially offsets the adverse effects. The findings underscore the importance of fostering a more equitable economic environment and supportive digital ecosystems to restore confidence in family formation and bolster demographic resilience.