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The Role of Coresidency with Adult Children in the Labor Force Participation Decisions of Older Men and Women in China

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  • Connelly, Rachel

    () (Bowdoin College)

  • Maurer-Fazio, Margaret

    () (Bates College)

  • Zhang, Dandan

    () (Peking University)

Abstract

Over the course of China's economic reforms, a pronounced divergence in the labor force participation patterns of rural and urban elders emerged – rural elders increased their rates of participation while urban elders reduced theirs. In this project, based on the data of the Chinese population censuses of 1982 and 2000, we employ a two-stage procedure to take into account the endogeneity of the residency and labor force participation decisions of older persons. We find that the effect of coresidency with adult children on the labor force participation of older adult differs by urban vs. rural residence. In 1982, the LFPR of urban elders who coresided with their adult children were significantly higher than those who did not coreside. By 2000, this effect completely disappeared. In contrast, in rural areas, coresidency with adult children had a large and significant negative effect on the labor force participation of both male and female elders. This effect diminished only slightly over the reform period. Finally, we decompose the changes over time in elders' labor force participation decisions and find that the response effect for all groups (male and female, urban and rural) is positive, such that, holding the levels of demographic and economic variables constant, each group of elders would have had higher rates of participation in 2000 than in 1982. The remarkable divergence in urban and rural elders' labor force participation trends are due to differences in the relative sizes of their attribute and response effects.

Suggested Citation

  • Connelly, Rachel & Maurer-Fazio, Margaret & Zhang, Dandan, 2014. "The Role of Coresidency with Adult Children in the Labor Force Participation Decisions of Older Men and Women in China," IZA Discussion Papers 8068, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp8068
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    References listed on IDEAS

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    1. Chang, Hongqin & Dong, Xiao-yuan & MacPhail, Fiona, 2011. "Labor Migration and Time Use Patterns of the Left-behind Children and Elderly in Rural China," World Development, Elsevier, vol. 39(12), pages 2199-2210.
    2. Margaret Maurer-Fazio & James W. Hughes & Dandan Zhang, 2010. "A comparison and decomposition of reform-era labor force participation rates of China's ethnic minorities and Han majority," International Journal of Manpower, Emerald Group Publishing, vol. 31(2), pages 138-162, May.
    3. Terza, Joseph V. & Basu, Anirban & Rathouz, Paul J., 2008. "Two-stage residual inclusion estimation: Addressing endogeneity in health econometric modeling," Journal of Health Economics, Elsevier, vol. 27(3), pages 531-543, May.
    4. Lan Liu & Xiao-yuan Dong & Xiaoying Zheng, 2010. "Parental Care and Married Women's Labor Supply in Urban China," Feminist Economics, Taylor & Francis Journals, vol. 16(3), pages 169-192.
    5. Susan Ettner, 1995. "The impact of “parent care” on female labor supply decisions," Demography, Springer;Population Association of America (PAA), vol. 32(1), pages 63-80, February.
    6. Borooah, Vani & Iyer, Sriya, 2005. "The Decomposition of Inter-Group Differences in a Logit Model: Extending the Oaxaca-Blinder Approach with an Application to School Enrolment in India," MPRA Paper 19418, University Library of Munich, Germany.
    7. Margaret Maurer-Fazio & James Hughes & Dandan Zhang, 2007. "An Ocean formed from one hundred rivers: the effects of ethnicity, gender, marriage, and location on labor force participation in urban China," Feminist Economics, Taylor & Francis Journals, vol. 13(3-4), pages 159-187.
    8. Margaret Maurer-Fazio & James Hughes & Dandan Zhang, 2005. "Economic Reform and Changing Patterns of Labor Force Participation in Urban and Rural China," William Davidson Institute Working Papers Series wp787, William Davidson Institute at the University of Michigan.
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    Citations

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    Cited by:

    1. Hare, Denise, 2016. "What accounts for the decline in labor force participation among married women in urban China, 1991–2011?," China Economic Review, Elsevier, vol. 38(C), pages 251-266.
    2. Lingguo Cheng & Hong Liu & Ye Zhang & Zhong Zhao, 2018. "The heterogeneous impact of pension income on elderly living arrangements: evidence from China’s new rural pension scheme," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(1), pages 155-192, January.
    3. Connelly, Rachel & Iannotti, Michael & Maurer-Fazio, Margaret & Zhang, Dandan, 2014. "Coresidency, Ethnicity, and Happiness of China's Rural Elders," IZA Discussion Papers 8194, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    labor force participation; elders; China; retirement; coresidency; rural and urban; living arrangements;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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