The Influence of Older Parents' Care-giving Activities on Labor Supply of Adult Children:A Study Based on CFPS

Abstract

With the increasingly rise in the elderly population ratio and the gradually severe aging crisis in other countries, our society perceive unprecedented fear of the arrival of aging society. Although the elderly would increase family and society burdens in some respects, the above view may overlook the close social and economic linkage among family members between generations. Therefore, it may neglect or underestimate the social value of the Chinese elderly in providing family care activities and their impacts on the younger generation.According to the existing researches and data availability in CFPS database, we divide the older parents' care-giving activities into taking care of grandchildren and helping children with their housework. Also we divide the adult children's labor supply variable into labor participation and working hours. Then we try to analyze the impact of elderly parents' care-giving activities on their adult children's labor supply. What's more, we also take the differences between male and female, rural and urban residents into account, and get some interesting findings.Our results indicate that the elderly's taking care of their grandchildren can significantly improve their adult children's labor supply. For example, male labor participation rate increases by 6.3%, while women increase by 14.3%. Thus, its impact on women is much greater than men. Otherwise, the influence on rural and urban residents is also quite different; precisely the impact on rural residents' labor participation rate is greater than the urban ones, and the impact on the city residents' labor supply mainly reflects in the work time. Inequality in public services and the differences in employment ability between urban and rural residents are important reasons for the heterogeneity problem.The policy implication of this paper is that, in the context of rapid globalization and urbanization, the government should support and guide the construction of modern families that proceed from national conditions on the basis of maintaining the traditional excellent family ethics and culture. We should take advantage of fiscal and taxation policies to alleviate the economic pressure of childcare and elderly caring on adult children, gradually solve the increasingly serious gender discrimination in the employment market, and progressively eliminate the public service benefits inequality caused by the household registration system.In short, this paper mainly expands the existing research in the following three aspects. First, combining with the particularity of Chinese family culture, we try to explain the contradiction between the increase in the proportion of elderly population ratio and the high level of labor supply of adult children from the perspective of the elderly's role in taking care of grandchildren and helping children with their housework. Second, after fully considering the differences between families in the level of income, property, age, residence and family structure, we empirically analyzes the influence of older parents' care-giving activities on the labor supply of their adult children. Third, we try to solve the endogeneity by using instrumental variables, which would avoid the estimation errors effectively and thus make the estimation results more reliable because it effectively avoids the estimation errors.