A Lack of Trust Fuels Baby Bust (in China)
Social trust significantly increases Chinese fertility intentions, with each unit increase in interpersonal trust raising the ideal number of children by 0.018
Chinese adults with higher interpersonal trust want significantly more children, according to a major study of 64,161 people that challenges conventional wisdom about the country's demographic crisis. Each unit increase in social trust raises ideal family size by 0.018 children (think moving from "neutral" to "somewhat agree" that people can be trusted). The effect 4x in urban areas where traditional support networks have eroded.
Why it matters: This paper from North China University of Technology economists Xin Deng, Yang Wang, and Xiaobo Tao suggests Beijing is treating one part of the puzzle, but ignoring other parts: collapsing social cohesion that makes young Chinese wary of bringing children into an uncertain world. For investors and policymakers tracking China's economic trajectory, the findings imply that demographic recovery requires rebuilding social trust.
Understanding the trust measurements: The study uses a 5-point scale asking "Do you agree most people in society can be trusted?"
Average Chinese response: 3.48 (between neutral and somewhat trusting)
Provincial averages range from 3.2 to 3.8
The evidence at a glance:
64,161 respondents surveyed across seven waves from 2010 to 2021
2.118 ideal children versus 1.09 actual fertility rate reveals massive intention-action gap
0.018 child increase per unit of individual trust, i.e. moving from complete distrust to complete trust correlates with wanting 0.09 more children
0.005 additional increase when individual trust combines with high provincial trust environment
4x stronger effect in cities: urban residents who move up one trust point in a high-trust city want 0.008 more children, while rural residents making the same shift want only 0.002
15.6 percent of China now over 65, up from 8.9 percent in 2010
Negative 0.99 per thousand population growth rate in 2024
A natural experiment : The researchers faced a challenge: does trust cause higher fertility desires, or do family-oriented people become more trusting? To untangle causation, they used China's mountains as a natural experiment. Historically, people in mountainous provinces like Tibet (averaging 22-degree slopes) had to rely on neighbors for survival, building stronger trust traditions than those in flat provinces like Jiangsu (3-degree slopes).
Using NASA elevation data at 30-meter resolution, they found each degree of average slope correlates with 0.236 higher trust scores. This geographic variation, unrelated to contemporary economic factors, provided clean identification of trust's causal effect on fertility.
How trust shapes fertility decisions: The study develops an overlapping generations model revealing two mechanisms. First, trust reduces perceived childbearing costs by lowering uncertainty about finding reliable childcare, medical care, and education. Second, trust enhances expected returns from children by increasing confidence in long-term reciprocal support. Simulations show these effects create self-reinforcing spirals: high-trust societies maintain higher fertility, while low-trust environments see both metrics decline together.
The concept of "contextualized trust": You can’t just expect one person being super trusting in the city would have the same expectations as being trusting in a small town. After all, a trusting person in distrustful Shanghai faces different fertility calculations than an equally trusting person in high-trust Tibet. The researchers attempt to measure both individual trust and provincial average trust, then multiplied them together to capture how much your personal trust matters in your social environment. This interaction effect adds 0.005 children per unit on top of individual trust's direct effect.
The provincial divide tells the story: Western provinces with traditional kinship networks show highest fertility intentions: Xinjiang (2.8 children), Tibet (2.6), Ningxia (2.5), and Qinghai (2.5). Coastal cities show lowest: Shanghai (1.7), Beijing (1.8), Jiangsu (1.9), and Zhejiang (1.9). The pattern holds even controlling for income, education, and urbanization.
Income paradox in concrete terms: Trust matters most for those who can't buy their way out of uncertainty. A middle-income family (earning 10,000-50,000 RMB annually) that moves up one trust point sees desired family size increase by 0.006 children. For a couple moving from distrust to trust in a supportive community, that translates to wanting roughly 0.12 more children.
Low-income (under 10,000 RMB): 0.004 increase per trust unit
Middle-income (10,000-50,000 RMB): 0.006 increase per trust unit
High-income (above 50,000 RMB): 0.007 increase but with lower statistical confidence
The rich has a buffer against uncertainty; everyone else needs social bonds to feel secure about parenthood.
Demographics reveal targeted effects:
Women respond 25% more strongly than men: each trust unit increases women's fertility intentions by 0.005 children versus men's 0.004
Childbearing-age adults (18-49) show amplified response at 0.006 children per trust unit
Urban vs rural divide: Urban hukou holders show 0.008 increase per trust unit—four times rural residents' 0.002, suggesting traditional village networks already provide what trust offers in cities
Daughter preference increases by 0.014 children per trust unit, nearly double the 0.008 increase for son preference
Belief in a Happy & Fair world: Trust doesn't just reduce economic anxiety, but how you see the world:
Happiness channel: Each unit increase in happiness (1-5 scale) correlates with wanting 0.083 more children. Trust significantly boosts happiness.
Fairness channel: Each unit increase in perceived societal fairness correlates with desiring 0.042 more children. Trust enhances fairness perceptions.
To put these in perspective: the trust effect (0.018) is roughly equivalent to a 10% income increase or one additional year of education. It's smaller than getting married (increases desired children by 0.3) but larger than homeownership (0.01).
What moves the needle on Chinese fertility intentions:
Moving from complete distrust to complete trust: +0.36 children (massive effect for those making full shift)
Living in high-trust vs low-trust province: +0.12 children (moderate community effect)
Urban resident gaining trust in trusting city: +0.032 children (4x rural effect)
Each point of happiness gained: +0.083 children (large psychological effect)
Each point of fairness perception: +0.042 children (moderate psychological effect)
Methodological rigor: The findings survive multiple robustness tests. Using an alternative trust measure based on reverse-coded suspicion ("others will take advantage of you") yields a coefficient of 0.025. Post-Double Selection Lasso with 249 control variables maintains the effect at 0.004. Alternative terrain instruments using slope standard deviation produce consistent results. The instrumental variable F-statistics exceed 5,282—far above the conventional threshold of 10 for instrument strength.
The data foundation: The China General Social Survey covers all 31 provinces using stratified multi-stage probability sampling. Researchers merged seven survey waves (2010, 2012, 2013, 2015, 2017, 2018, 2021), excluding outliers reporting over 10 desired children. The study controls for 84 variables including education, political affiliation, hukou status, marital status, health, housing, income, employment, plus province and year fixed effects.
What Beijing's policies miss: The 20th Party Congress elevated fertility to strategic priority. The 2024 Government Work Report expanded childbirth support. Yet macro-level incentives have failed to reverse decline. This research suggests why: you cannot subsidize your way to social cohesion. Trust evolves through transparent governance, reliable institutions, and repeated positive interactions—none of which appear in current policy packages.
The global pattern emerges: China isn't alone in discovering that fertility depends on faith in society. When Russia faced crisis in 2022-2023, researchers surveying 7,967 citizens found an even starker pattern: psychological factors including political trust explained 76 percent of fertility decision variance, while economic factors explained only 24 percent. Russians who trusted their government despite the crisis were 17.2 percentage points less likely to postpone childbearing (an effect equivalent to doubling household income). Those feeling fear were 10.2 percentage points more likely to delay. Even when 45 percent valued their maternity capital payments highly, financial support couldn't overcome emotional uncertainty.
Study limitations acknowledged: The research captures intentions, not actual births, though intentions strongly predict behavior. Post-2021 pandemic effects remain unmeasured. Digital networks' role in trust formation needs investigation. The mechanisms linking trust to happiness and fairness require deeper exploration. Cross-national comparisons would strengthen external validity.
The authors' conclusion: Deng, Wang, and Tao argue that "recognizing trust as a modifiable social asset may offer new levers for addressing demographic challenges beyond conventional economic incentives." Their simulations demonstrate how small changes in trust persistence and transmission, parameters governments can influence through policy, can shift entire societies between demographic growth and decline.
Bottomline: China faces a trust deficit as much as a baby deficit. People don't bring children into societies they don't trust. The quadrupled urban effect, stronger impact on lower incomes, and psychological mediation through happiness and fairness all point toward the same conclusion.
These findings align with emerging global evidence about institutional quality and fertility. A European study of 216 regions by Giannantoni and Rodríguez-Pose finds that a 1 percent improvement in regional government quality correlates with an 8 percent increase in fertility rates. Higher-quality governance reduces by 11.1 percent the chance of regions experiencing both low fertility and low female employment. Nordic regions with strong institutions maintain both high female workforce participation (over 78 percent) and healthier birth rates, while Southern European regions with weaker governance see both metrics collapse (i.e. Italy's Campania has just 27.7 percent female employment and fertility below replacement)
The Russian crisis data reinforces this pattern: subjective factors including political trust explained 76 percent of fertility decision variance during 2022-2023, while objective economic factors explained only 24 percent. Russians who supported their government were 17.2 percentage points less likely to postpone childbearing, while those feeling fear were 10.2 points more likely to delay. Even valued maternity payments couldn't overcome institutional uncertainty.
These converging findings from China, Europe, and Russia reveal that economics and social psychology are deeply interconnected in fertility decisions. Trust and institutional quality don't replace the need for financial support, god only knows how much stuff I written about incomes and birthrates. But money alone cannot purchase the confidence required for parenthood. When trust erodes or institutions fail, that’s a multiplier effect (like x1.1 or -x1.2) that weakens other parts like support. When trust strengthens and governance improves, the same economic resources generate greater impact.
I mean, how can you trust someone (or government) who refuses to put their money where their mouth is?
Reversing demographic decline requires rebuilding the social trust (among other things) that make people confident about the future, not just their finances at that point in time. The challenge isn't choosing between economic and social policies but understanding how trust and institutional quality amplify or undermine every economic intervention Beijing attempts.