Grandparental childcare and female labor market behaviors: Evidence from China

Abstract

Using matched employer-employee survey data from China, this paper examines the relationship between grandparental childcare and female labor market behaviors based on within-firm estimations. Our analysis reveals that grandparental childcare can significantly and effectively improve the labor supply of women with children at the extensive margin although not at the intensive margin. Moreover, grandparental childcare is found to enhance the monthly earnings of working mothers without requiring more intensive work. Grandparental childcare can also assist working mothers in advancing to managerial positions. These results suggest that the discrimination by firms against women with children is reduced and their productivity is improved when grandparental childcare is available. Therefore, grandparental childcare plays a crucial role in promoting gender equality and various measures should be implemented to eliminate factors that hinder the effective utilization of grandparental childcare.