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Data on 2,288 married women from the 2006 China Health and NutritionSurvey are deployed to study how off-farm female employment affectsfertility. Such employment reduces a married woman’s actual number ofchildren by 0.64, her preferred number by 0.48, and her probability ofhaving more than one child by 54.8 percent. Causality flows in bothdirections; hence, we use well validated instrumental variables toestimate employment status. China has deep concerns with both femaleemployment and population size. Moreover, female employment is growingquickly. Hence, its implications for fertility must be understood.Ramifications for China’s one-child policy are discussed.