Study Of Females’ Labor Supply During The Period Of Economic Transition In China

Based on relevant theories and previous research, this thesis makes an empirical analysis on Chinese female labor supply by using macro-data and China Health and Nutrition Survey (CHNS). In this thesis, the various factors affecting Chinese female labor supply have been explored by using Chinese female labor function which is estimated by using Heckman two-step method. The analysis is made from different perspectives including female sample population, urban and rural areas and different regions across China. This thesis also contains the empirical results of studying effects of substitution and income caused by the change in wages by using Slutsky equation. The results show that, for the female sample population, factors such as ages, marital status, education, family income,whether there are elderly people and babies in a family played a significant role in affecting female labor supply, and yet, higher wages will help to increase female labor supply. The study for urban and rural areas reveals that, factors such as marital status, education, family income only played a significant role for urban females, rather than rural females. For rural females, having babies would reduce their working time significantly. The study based on different regions tells us that, for females in eastern and middle parts of China, having elderly people in their families would increase the probabilities of their working, while having babies in their families have babies would increase their probabilities of withdrawing from the labor market.The research also demonstrates that the income effects of wage increase would have negative impacts on female labor supply, while the substitution effects would be positive. The composite impacts would be positive, i.e. the females would increase their working time along with wage increase. This conclusion holds true for rural females. The regional studies show that, in eastern and western parts of China, female would respond to increase their working time facing the increases in the market wage rates. On the contrary, in the middle part, the income effects were greater than the effects of substitution, i.e. facing the wage increase, they would choose to reduce their working time, indicating the shape of their labor supply curve bended backward.The thesis is concluded by making some relevant policy recommendations based on the empirical results.