Women's Employment and Child Care Choices in Urban China during the Economic Transition

China's transition from a centrally planned to a market economy has substantially eroded governmental support for child care, raising the concern about how the change of child care provision may affect women's labor market participation. This article examines the impact of child care availability and affordability on the employment and child care choices of urban Chinese women with preschool children during the transition. The analysis shows that the presence of day care in the community is positively associated with a mother's labor force participation and labor hour supply and that the rising costs of hired caregivers reduce the mother's labor hour supply. The analysis also finds that both the costs of hired caregivers and family income have important effects on the use of out-of-home care services. Simulations indicate that the decline in day care presence would account for 46% of the decrease in mothers' labor force participation during the public-sector restructuring between 1997 and 2000.