Abstract
Will financial income lead to a decreased labor force participation by its negative income effect? Using the 2017 China Household Finance Survey, we find that the household financial income significantly increases married women’s probability of labor force participation in urban China, which stands in sharp contrast with transfer income, another non-labor income. We believe that this is because of the ”cash in advance” property of financial income, that is, the household must accumulate cash beforehand in order to gain in the financial market. We further show that both the financial market participation decision and level of invested financial asset holdings lead to an increased labor participation. Our results dismiss the suspicion that engaging in the financial market may allure or distract people from working.
Published Version
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