Abstract

China’s transition from strict fertility control toward a pronatalist regime raises important questions regarding how institutional regime changes are associated with wage outcomes across different policy stages. While previous studies primarily examine contemporaneous labor-market outcomes, this study evaluates wage associations across fertility-policy regime stages using a dynamic panel specification. Using five waves of the China Family Panel Studies (CFPS) from 2014 to 2022, the analysis constructs a short, unbalanced panel and estimates a wage equation using two-step System Generalized Method of Moments (System GMM) with collapsed instruments and restricted lag depth to address dynamic endogeneity and unobserved heterogeneity. To improve representativeness and mitigate observed wage-observability differences, survey weights are combined with inverse-probability weighting. The preferred baseline estimates indicate a positive but modest lagged-wage coefficient. Monte Carlo and sensitivity analyses further suggest that the persistence estimate is fragile and may overstate the degree of true persistence in this short-panel setting. Accordingly, the findings do not support strong intertemporal wage persistence and instead indicate only limited dependence of current wages on past wage realizations. The dynamic specification is therefore informative primarily as a diagnostic framework for assessing whether regime-stage wage associations exhibit meaningful persistence. Additional exposure-based heterogeneity analyses show negative interaction coefficients for Female and childbearing women (CBW). Married women aged 20–39 experience additional negative wage associations during fertility-policy regime stages, with similar results obtained under a narrower CBW20–35 robustness definition. These findings suggest that positive aggregate regime-stage associations may conceal relative wage disadvantages among women in demographic groups more plausibly exposed to fertility-policy-related labor-market conditions. The CBW indicator is interpreted as a demographic-exposure proxy rather than as a direct measure of employer expectations, fertility intentions, or discrimination. Overall, the results highlight exposure-based heterogeneity in regime-stage wage associations while emphasizing that the estimates should be interpreted as conditional associations embedded within broader institutional transitions rather than as causal fertility-policy effects.

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