The impact of child births on female labor force participation in China

Abstract

Adjustments to fertility policy in recent years have led to changes in fertility level and these have had an impact on the overall population and have implications for labor force participation. In particular, fertility policy adjustments have had a direct influence on the female labor force. This paper uses data from China Family Panel Studies in 2016 to test the impact that increases in the number of child births that have occurred as result of shifts in fertility level are having on women’s labor force participation. Our findings show that the influence of the number of children on the participation of married women in the labor force is shown by a “U-shaped” non-linear relationship dominated by substitution effect and income effect. The turning point of urban married women from the substitution effect to the income effect occurs earlier than it does for rural married women. This means that urban married women are more sensitive to the economic pressure that results from child births. Therefore, the Universal Two-Child policy, introduced at the beginning of 2016, inevitably has a direct negative effect on women’s labor force participation. Helping women to maintain work-family balance has become a problem that must be addressed at present.