China sees an absolute decline in its working-age population because of its implementation of the one-child policy for over 30 years, coupled with a sharp decrease in fertility desire. An increase in the labor supply of married women can effectively relieve the pressure from demographic liabilities China are going to face on a short-term basis. Since 2015, the Chinese government has carried out the universal two-child policy, when more and more families will have their second child. The growing number of young children, on the one hand, will increase the financial burden of families, urging the mothers to go out to work; on the other hand, it will increase their pressure to take care of young children, hindering them to enter the labor market. This paper presents an exploration into how married women opt for between families and work under such background, and the assessment of the influences of residential patterns on their labor supply in China. Different from most of the current literature, this paper involves a perspective of child care. On this basis, studies are made into how to share the pressure of married women to look after their young children when living together with the old at home so that the influences are discussed on their labor supply. There may be endogeneity between the selection of residential patterns and the labor supply of married women. In consideration of this factor, an approach of Special Regressor Method is adopted in this paper during the empirical analysis to improve the deficiencies of the current literature in the econometrics method. This is also the main contribution of this paper. First of all, a theoretical analytical framework is built in this paper to explain how married women determine their time allocation and how residential patterns affect the labor supply. Through the comparative static analysis, it is found that living with the old at home can improve the labor supply of married women. Then, because the selection of residential patterns and labor participation of married women are both dummy variables, it is difficult for the IV-Probit regression approach to effectively solve the endogeneity between them. The Special Regressor Method is used in the part of the empirical analysis to solve the problem of binary choice models with discrete endogenous regressors. This paper also covers a consideration that the impact of residential patterns on the labor participation of married women may present heterogeneity of the number of young children. Using the 2011 data of " China Household Finance Survey”, it is found that living with the old at home can significantly enhance the labor participation rate of married women in China, with the rising range of 49 percent. This result can be perceived as the causal effect between the two sides, and it exerts the most obvious influence on the women with only one young child. Finally, whether married women take the job is their own selection. In view of this fact, it is found with the Tobit regression method that living together with the old will also significantly extend the weekly working hours of married women to 4 hours, with the growth rate of 8.26 percent. Based on the research results of this paper, the ordinary families in China should be more open-minded to " living together among generations”. This can prompt more married women enter the labor market, improve the financial situation of their families while having more time to take care of their young children. Moreover, the Chinese government should encourage " living together among generations” through publicity and economic support to the benefit of improving the labor supply of China.
Residential Patterns，the Number of Young Children and the Labor Supply of Married Women：From the Perspective of Child Care
Journal of Finance and Economics Vol. 45, Issue 06, pp. 57 - 70 (2019) DOI:10.16538/j.cnki.jfe.2019.06.005
Chen L, Fan H L，Zhao N, et al. The impact of informal care on employment for women in China[J]. Economic Research Journal, 2016, (3): 176-189. (In Chinese)
Chen Z, Lu M, Wu G Y. Marriage and women employment during economic transition: Economic understanding on related stylized facts[A]. Zhang S G, Deng Z L. Chinese social sciences review[C]. Beijing: Law Press, 2004. (In Chinese)
Du F L. Household structure, child care and female labor force participation: Evidence from the urban China[J]. World Economic Papers, 2008, (2): 1-12. (In Chinese)
Hou J W, Huang S L, Xin Z Q, et al. A change in the desired fertility of the Chinese population: 1980-2011[J]. Social Sciences in China, 2014, (4): 78-97. (In Chinese)
Liu A Y, Tong X. The present situation of gender attitudes and the factors influencing them: Based on the third survey of women’s social status in China[J]. Social Sciences in China, 2014, (2): 116-129. (In Chinese)
Ma S, Li X L, Cai D L. Minimum wage and labor force participation of married women[J]. Economic Research Journal, 2017, (6): 153-168. (In Chinese)
Shen K, Zhang Y, Yan P. Family structure and female labor force participation in China[J]. Population Research, 2012, (5): 15-27. (In Chinese)
Tong H J, Wu T T. The influence of living with the elderly on young couples’ marital relationship[J]. China Journal of Health Psychology, 2017, (2): 214-218. (In Chinese)
Yang Y C, Tan Y M, Huang X, et al. Housing choice of urban residents in China based on the transformation of cultural values: A case study in Chengdu[J]. Acta Geographica Sinica, 2012, (6): 841-852. (In Chinese)
Yao X G, Tan L. Family income and labor force participation of married women in urban China[J]. Economic Research Journal，2005, (7): 18-27. (In Chinese)
Yin Y, Zhou J S. The role of demographic dividend to China economic growth: Analysis based on provincial panel data[J]. Nankai Economic Studies, 2012, (2): 120-130. (In Chinese)
Zhang C C. Impacts of number of children on the labor supply and wage earnings of married women[J]. Population & Economics, 2011, (5): 29-35. (In Chinese)
Angrist J D, Evans W N. Children and their parents’ labor supply: Evidence from exogenous variation in family size[J]. The American Economic Review, 1998, 88(3): 450-477.
Becker S G. A treatise on the family[M]. Cambridge: Harvard University Press, 1990.
Blanchard O J, Fischer S. Lectures on macroeconomics[M]. Cambridge, Massachusetts and London, England: MIT Press, 1993.
Dong Y Y, Lewbel A. A simple estimator for binary choice models with endogenous regressors[J]. Econometric Reviews, 2015, 34(1-2): 82-105. DOI:10.1080/07474938.2014.944470
Ettner S L. The impact of “parent care” on female labor supply decisions[J]. Demography, 1995, 32(1): 63-80. DOI:10.2307/2061897
Ettner S L. The opportunity costs of elder care[J]. The Journal of Human Resources, 1996, 31(1): 189-205. DOI:10.2307/146047
Jacobsen J P, Pearce III J W, Rosenbloom J L. The effects of childbearing on married women’s labor supply and earnings: Using twin births as a natural experiment[J]. The Journal of Human Resources, 1999, 34(3): 449-474. DOI:10.2307/146376
Joshi H E, Layard R, Owen S J. Why are more women working in britain?[J]. Journal of Labor Economics, 1985, 3(1): S147-S176. DOI:10.1086/298079
Killingsworth M R. Labor supply[M]. New York: Cambridge University Press, 1983.
Kolodinsky J, Shirey L. The impact of living with an elder parent on adult daughter’s labor supply and hours of work[J]. Journal of Family and Economic Issues, 2000, 21(2): 149-175. DOI:10.1023/A:1009426002699
Lewbel A. An overview of the special regressor method[R]. Boston College Working Papers in Economics 810, 2012.
Lewbel A, Dong Y Y, Yang T T. Comparing features of convenient estimators for binary choice models with endoge- nous regressors[J]. Canadian Journal of Economics, 2012, 45(3): 809-829. DOI:10.1111/caje.2012.45.issue-3
Michael R T. Consequences of the rise in female labor force participation rates: Questions and probes[J]. Journal of Labor Economics, 1985, 3(1): S117-S146. DOI:10.1086/298078
Mincer J. Labor force participation of married women: A study of labor supply[A]. Aspects of Labor Economics[C]. Princeton, New Jersey, USA: Princeton University Press, 1962.
Ogawa N, Ermisch J F. Family structure, home time demands, and the employment patterns of japanese married women[J]. Journal of Labor Economics, 1996, 14(4): 677-702. DOI:10.1086/209827
Oishi A S, Oshio T. Coresidence with parents and a wife’s decision to work in Japan[R]. Discussion Paper, 2004.
Pezzin L E, Schone B S. Intergenerational household formation, female labor supply and informal caregiving: A bargaining approach[J]. The Journal of Human Resources, 1999, 34(3): 475-503. DOI:10.2307/146377
Rosenzweig M R, Wolpin K I. Testing the quantity-quality fertility model: The use of twins as a natural experiment[J]. Econometrica, 1980, 48(1): 227-240. DOI:10.2307/1912026
Sasaki M. The causal effect of family structure on labor force participation among Japanese married women[J]. The Journal of Human Resources, 2002, 37(2): 429-440. DOI:10.2307/3069654
Smith J P, Ward M P. Time-series growth in the female labor force[J]. Journal of Labor Economics, 1985, 3(1): S59-S90. DOI:10.1086/298076
Cite this article
Sun Jisheng, Zhou Yahong. Residential Patterns，the Number of Young Children and the Labor Supply of Married Women：From the Perspective of Child Care[J]. Journal of Finance and Economics, 2019, 45(6): 57-70.
Previous: Does the WTO Dispute Settlement Mechanism Actually Promote Export？The Empirical Study Based on WTO Dispute Cases