Do Dragon babies have it good?

Contrary to popular belief, being born in a Chinese Dragon year may not be as advantageous as it seems. A study by Agarwal, Qian, Sing and Tan (2021) finds that Dragon babies in fact face daunting challenges ahead.

Wong Wei Chen

28 October 2024

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Among the twelve signs of the Chinese zodiac, the Dragon stands out a symbol of power, good fortune, and also hearkens back to imperial nobility since this mythical creature has historically been associated with the Chinese emperors of old.

Each sign corresponds to a specific year in a 12-year cycle, and children born in the Dragon year are often seen as enjoying special privileges and blessings conferred by their auspicious zodiac sign. Hence, for this reason, many Chinese parents prefer to give birth in this year, as Agarwal, Qian, Sing and Tan (2021) discover in their study “Fortunes of Dragons: Cohort size effects on life outcomes”.

While astrology persists in a world now largely premised on scientific principles and empirical evidence, do zodiac predictions pan out as expected – or not? In an apparent reversal of enthusiastic optimism, Agarawal et al.’s study in fact found that children born in the Dragon year tended to fare worse than other cohorts later in life.

Empirical design and data

If we begin with the basic premise that life outcomes for cohorts are influenced by various other factors in addition to birth year – such as concurrent macroeconomic and sociological changes, demographic shifts and technological advancements – the methodological challenge therefore lies in isolating and measuring the causative impact of birth year.

Earlier work on birth cohorts has been hindered by identification challenges arising from multicollinearity among independent variables predicting life outcomes, as the researchers pointed out in their study. For illustration, when a birth cohort was born during the Asian financial crisis of the late 1990s, could adverse circumstances later on in life be attributed to the birth year or the poor economy, or both?

Agarwal et al. therefore deployed a difference-in-differences methodology to the multiracial population in Singapore, with controls for year of birth fixed effects, such as socioeconomic factors, the impact of government policies and demographic shifts, for example.

The researchers found that only the Chinese majority tended to conceive more babies (treatment group aka “Chinese Dragons”) during the auspicious Dragon year, while other non-Chinese minorities appeared indifferent (with their babies forming the control group). Under such an arrangement, both treatment and control group undergo similar longitudinal changes (e.g. technological advancement, implementation of government policies etc.), so any significant socioeconomic or consumption outcomes in the “Chinese Dragons” relative to the control group could reasonably be attributed to the birth year.

The study’s analysis employs three sources of administrative data: (i) first, monthly data from Singapore Statistics (now branded as SingStat) for four Chinese zodiac cycles (48 years) between January 1960 and December 2007; (ii) second, a comprehensive data set of a random and representative sample of all customers at a leading bank in Singapore, which contains information on customer income, occupation, monthly financial transactions, demographic information, and also self-reported employment status, type of occupation and type of residence, and (iii) third, individual-level university admissions data for the two main national universities at that time, NUS and NTU, between 1981 and 2015.

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Birth findings

Regression analysis showed that the number of monthly births spiked by a significant 9.7% in Dragon years, and that the increase was contributed by the Chinese Dragons. In contrast, the change in birth-rate for the control group was statistically insignificant.

The researchers additionally accounted for selection bias, with the hypothesis that parents with lower levels of formal education might be more likely to adhere to traditional non-scientific superstitious beliefs; on the other hand, those with more education or resources may be more motivated or have higher ability to control the timing of childbearing.

Differences in the socioeconomic status of parents (if any) introduced endogeneity arising from an omitted variable in the baseline regression model, and could render the causal relationship between birth year and life outcomes invalid. Agarwal et al. however found no significant differences in parental income levels, employment status or occupation for parents across different birth years.

Life outcomes

The study discovered that Chinese Dragons were 2.3 percentage points less likely to be admitted to local universities than other Chinese, relative to their non-Chinese counterparts. In addition to a larger cohort applying to universities, thus entailing more competition on the overall, the researchers additionally found Chinese Dragons’ compromised ability to prepare for tertiary education to be an even more salient factor.

Later on in life, as they enter the workforce, the incomes of Chinese Dragon cohorts were lower by a statistically significant 6.3% on average. Furthermore, Chinese Dragons were 3.4 percentage points less likely to be employed in professional occupations in the formal sector, and 1.1 percentage points more likely to be engaged in self-employment or other types of income generating activities generally deemed to be lower paying than professional occupations.

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Testing the corollaries

Due to the national service mandate required of all Singaporean males, Dragon men enter the labour market with women two years younger, who were born in the year of the Horse. Similarly, Dragon women enter the labour market with men who are two years older, born in the year of the Tiger.

A natural corollary would be that women born in Horse years will earn lower incomes due to their exposure to the Dragon cohort, whereas men born in Horse years, who are not exposed, will not. Regression analysis found that Chinese Horse women’s incomes are 3.2% lower on average, while Horse men do not have significantly different income levels.

In other robustness tests, the study found that Chinese Dragons were 2.6 percentage points less likely to hold a credit account than other Chinese, relative to the difference among their non-Chinese counterparts. This is unsurprising since Chinese Dragons tend to have relatively lower incomes.

In a rather surprising turn of events, the study found that Chinese Dragons exhibited similar consumption of luxury goods and services, such as jewellery and beauty salons. They are also no less likely to reside in private housing, an important status symbol in Singapore. The research thus showed that Dragon cohorts are just as inclined toward conspicuous consumption and status signalling compared to other cohorts.

Policy implications

Contrary to astrological predictions and notwithstanding the “blessings” of an auspicious zodiac patron, Chinese Dragons face daunting future economic prospects, including a lower probability of admission to a national university, lower average income and a lower probability of holding a more highly paid professional occupation in the formal sector. In this instance, economics appeared to have trumped mythology.

The government has in the past taken mitigative actions, including opening nine new primary schools in preparation for the 1988 Dragon year cohort, and increasing university places in response to the larger Dragon cohorts.

In tandem, couples also ought to come to terms with the fact that timing childbirth according to astrological phenomena does not translate into anything in real life. The empirical evidence is simply against such a belief.

Agarwal, Sumit is the Low Tuck Kwong Distinguished Professor at the School of Business and Professor in the departments of Economics, Finance and Real Estate at the National University of Singapore.

Qian, Wenlan is the Ng Teng Fong Chair Professor in Real Estate and Professor of Finance and Real Estate at the NUS Business School.

Sing, Tien Foo is Provost's Chair Professor at the Department of Real Estate, NUS Business School.

Tan, Poh Lin is a Senior Research Fellow at the Institute of Policy Studies, Lee Kuan Yew School of Public Policy.