Married Women’s Labor Supply And Its’Income Distributional Effect In Urban China

Since economic reform, market-oriented reforms of employment system push the city women to the market, and while it promote city women’s employment autonomy. During this period city women’s labor supply has undergone significant changes, where declining labor force participation rate and widening gender gap has been a hot issue of existing researches on female labor supply. Whether to enter the labor market is just the first step of the labor supply decision, after that participants make decision on work hours. Besides the particularity of female labor supply behavior is that their labor supply decisions are made by allocating time among the labor market, non-market work and leisure, men’s decisions are made by allocating time between work and leisure. However, previous studies pay little attention to working time and non-market labor.This paper from three perspective including labor force participation, working time and non-market labor, based on a more long-term observation (1988-2009years), provides a more comprehensive and systematic study on changes in married women’s labor supply. The main contents include:Firstly, previous studies mainly focused on investigating the effect of changes in micro factors on labor force participation probability of married women. This paper makes a study on the decline in the total participation rate and changes in the individual labor force participation equation of married women. Firstly, this paper by using time series data (1988-2009) estimates the trend and cyclical effects. It finds that the total labor force participation rate of married women exhibits significantly procyclical effects and long-term downward trend in the annual probably0.4percentage points. Secondly by using the couple’paired samples of UHS (1988-2009), this paper estimates the labor participation equation of married women in four stages (1988-1992,1993-1997,1998-2002,2003-2009), and the phased estimated labor force participation equations show that significant changes in the behavior of the labor force participation of married women occurred. Then the extended O-B decomposition results show that changes in the behavior explained80.41percent of the decrease in labor force participation rate of married women during the period between1988and2009.Secondly, based on the couple’paired samples of UHS(1988-2009) and by using Heckman two stage and Tobit model, this paper estimates the structural equation of married women working time and then computes various types of elasticity. The results show that the impact of wage on married women’s work time is more significant than the impact of non-labor income, and own-wage elasticity is greater than cross-wage elasticity. Besides, compensated own-wage elasticity is positive that means substitution effect is greater than income effect, while compensated own-wage elasticity is in decline year by year.Thirdly, domestic work is generally taken into consideration in married women’s labor supply decisions; in particular, child care has an important impact on the labor force participation and working time of married women. This paper by using the couples’paired samples (CHNS1991-2009) and based on the empirical method proposed by Almudena et al.(2010) finds that comparative advantage has significant effects on chore work allocation between husband and wife, while on child care work allocation, married women take child’s care and education work as their own responsibility.Finally, during economic transition, household income inequality in urban China is increasing along with the significant decrease in married women’s labor force participation rate. Decline in married women’s labor force participation rate and the consequent change in their income share in the family surly have influences in their household income and household income inequality. Based on the couple’paired samples of UHS(1988-2009) and by using income source of CV2and variance decomposition this paper show that decrease in married women’s labor force participation rate exacerbates household income inequality, especially in the period of1995-2002. The policy implication of this paper is that:on the one hand, it should make a formation of the trinity policy system based on income support policies, active labor market policies promoting female employment and family policy associated with the female labor supply; on the other hand, it should pay special attention to three points in policy design including:①it should not only pay attention to the behavioral effects on those directly affected, but also can not ignore the indirect effects on the behavior of other family members that may arise;②it should attach importance to multi-faceted impact of policies, especially be more cautious in the presence of positive and negative effects.