Social trust and fertility intentions: Evidence from China with causal and structural insights

Xin Deng, Yang Wang and Xiaobo Tao

International Review of Financial Analysis, 2025, vol. 107, issue C

Abstract: This paper examines the causal impact of social trust on fertility intentions using nationally representative data from the China General Social Survey (CGSS). To provide structural interpretation, we develop a implicit overlapping generations (OLG) model in which social trust reduces the perceived cost of childbearing and enhances expected intergenerational returns. Simulation results reveal a reinforcing dynamic between trust and fertility across different parameter settings. To address potential endogeneity, we construct an instrumental variable based on provincial terrain slope, which captures exogenous variation in long-run trust formation. The results show that higher levels of interpersonal trust significantly increase the ideal number of children, and the estimates are robust to alternative trust measures and high-dimensional controls. Subsample results highlight heterogeneity by income level, age group, hukou status, and gender. Mechanism analyses further indicate that trust operates partly through improving subjective wellbeing and perceived social fairness. The findings underscore the role of social trust in shaping reproductive behavior and suggest that trust-building policies may complement conventional fertility support programs, especially in low-trust environments.

Keywords: Social trust; Fertility intentions; CGSS; Implicit OLG model; China (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:107:y:2025:i:c:s1057521925007033

DOI: 10.1016/j.irfa.2025.104616

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