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The Effect of Housing Wealth on Labor Force Participation: Evidence from China

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  • Fu, Shihe

    () (Southwestern University of Finance and Economics)

  • Liao, Yu

    () (Clark University)

  • Zhang, Junfu

    () (Clark University)

Abstract

This paper uses the 2011 China Household Finance Survey data to estimate the effect of change in housing value on homeowners' labor force participation. Using the average housing capital gains of other homes in the same community as an instrument for the housing capital gains of a given household, we find that a 100 thousand yuan increase in housing value leads to a 1.37 percentage point decrease in female homeowners' probability of participating in the labor force and a 1.49 percentage point increase in their probability of becoming housewives. We find little effect on men's labor force participation.

Suggested Citation

  • Fu, Shihe & Liao, Yu & Zhang, Junfu, 2016. "The Effect of Housing Wealth on Labor Force Participation: Evidence from China," IZA Discussion Papers 9745, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9745
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    Cited by:

    1. Liu, Shimeng & Yang, Xi, 2020. "Property tax limits and female labor supply: Evidence from the housing boom and bust," Journal of Housing Economics, Elsevier, vol. 50(C).
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    3. Zekai He & Jingjing Ye & Xiuzhen Shi, 2020. "Housing wealth and household consumption in urban China," Urban Studies, Urban Studies Journal Limited, vol. 57(8), pages 1714-1732, June.
    4. Liu, Jing & Xing, Chunbing & Zhang, Qiong, 2020. "House price, fertility rates and reproductive intentions," China Economic Review, Elsevier, vol. 62(C).
    5. Li, Feng & Xiao, Jing Jian, 2020. "Losing the future: Household wealth from urban housing demolition and children's human capital in China," China Economic Review, Elsevier, vol. 63(C).
    6. Steven F. Koch & Evelyn Tshela, 2020. "The Impact of Diabetes on Labour Market Outcomes," Working Papers 2020109, University of Pretoria, Department of Economics.
    7. Ziyu Liu & Yanlin Yang, 2020. "Impact of Development Zone Construction on Labor Share in China," Sustainability, MDPI, Open Access Journal, vol. 12(9), pages 1-22, May.
    8. Jianmei Zhao & Lin Liu & Ruihan Liu, 2018. "How house price appreciation affects homeowners' labour force participation : Evidence from urban China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(2), pages 233-252, April.
    9. Jin Xie & Yinying Cai & Hang Tang & Yuanqin Liao, 2020. "Housing Wealth Status and Informal Accumulation of Rural Villages at the Rural-Urban Fringe in Shanghai, China," Sustainability, MDPI, Open Access Journal, vol. 12(17), pages 1-23, August.
    10. Liu, Lu & Wang, Qiuyun & Zhang, Anquan, 2019. "The impact of housing price on non-housing consumption of the Chinese households: A general equilibrium analysis," The North American Journal of Economics and Finance, Elsevier, vol. 49(C), pages 152-164.
    11. Yuanyuan Chen & Zichen Deng, 2019. "Liquidity Constraint Shock, Job Search and Post Match Quality—Evidence from Rural-to-Urban Migrants in China," Journal of Labor Research, Springer, vol. 40(3), pages 332-355, September.
    12. Chen, Xi & Ge, Suqin, 2018. "Social norms and female labor force participation in urban China," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 966-987.
    13. Salari, Mahmoud & Javid, Roxana J., 2019. "How does female labor force participation impact on housing values?," Research in Economics, Elsevier, vol. 73(2), pages 129-137.

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    More about this item

    Keywords

    labor supply; housing price; housing wealth effect; labor force participation;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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