Academic journal article Demographic Research

Coresidence with Elderly Parents and Female Labor Supply in China

Academic journal article Demographic Research

Coresidence with Elderly Parents and Female Labor Supply in China

Article excerpt

(ProQuest: ... denotes formulae omitted.)

1.Introduction

Three decades of virtually uninterrupted economic hyper-growth since 1980 have propelled China into the ranks of upper-middle-income countries. However, female labor force participation, as one of the major contributors to economic development, has experienced a steep decline in the post-reform period. Women's employment was almost universal in the planned economy through the state-imposed full-employment policy (Zuo and Bian 2001). Between 1990 and 2010, female labor force participation rate at prime working ages (25-49) significantly decreased from 91% to 83%, while male labor force participation at the same ages only dropped by 2 percentage points. 4 Existing literature mostly attributes the faster decline in female employment to market-oriented reforms and the massive privatization of state-owned enterprises. As the power of the state eroded, both as an employer and advocate of women's rights, discrimination against female workers in hiring and layoffs increased (Bian 2002; Dong and Pandey 2012; Li and Li 2008; Yao and Tan 2005). However, supply-side factors, particularly changes in living arrangements which may affect women's decision to work, have remained largely neglected.

Coresidence of aging parents with their married children has been a prevalent living arrangement in China for centuries. Since the market-oriented economic reforms and enforcement of a one-child policy in the early 1980s, a series of dramatic social and cultural changes such as rising living standards, sustained low fertility, rapid urbanization, and weakening traditional norms has largely undermined the tradition of intergenerational coresidence (Chen 2005; Chu, Xie, and Yu 2011). Single-generation households have been increasing notably and elderly persons are less likely to live in extended households.5 For example, the share of elders aged 65 and over coresiding with children and grandchildren (three-generation households) declined from 47.4% in 1990 to 41.4% in 2000, and had further reduced to 32.8% by 2010. By contrast, the share of independent-living elders rose sharply from 26.7% to 41.7% over the same period (Hu and Peng 2014).6

Given the frequent time and monetary transfers in multi-generational households, researchers have increasingly paid attention to the impact of coresidence with elderly parents on female labor supply in Japan (Ogawa and Ermisch 1996; Sasaki 2002), South Korea (Chun, Kim, and Lee 2009), the United States (Kolodinsky and Shirey 2000; Compton and Pollak 2014) and Europe (Pagani and Marenzi 2008). The few articles touching upon the subject in China have revealed that grandparents in multi-generational households undertake a tremendous amount of grandchild care, which significantly reduces a mother's involvement in childcare (Chen, Liu, and Mair 2011; Chen, Short, and Entwisle 2000). However, little research has directly examined the outcome of coresidence with aging parents on women's labor market.

To gain a better understanding of the recent steep decline in female labor force participation in China, our study draws on a unique paired sample of married women and their parents to cast a fresh light on the importance of living arrangement for female employment. We first identify the causal impacts of coresidence and nearby residence with elderly parents on female labor force participation and hours of work, taking into account the endogeneity of living arrangement. We then explore whether the impacts are heterogeneous in urban and rural areas, given the huge differences between urban and rural employment in flexibility and accessibility. Finally, we examine whether women in extended households do receive time transfers from parents and are less involved in domestic work - an important mechanism through which coresidence affects female labor supply.

The rest of the paper is organized as follows. Section 2 summarizes the existing literature and how our study expands upon previous work. …

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