Childcare Costs and Migrant and Local Mothers’ Labor Force Participation in Urban China Feminist Economics

Feminist Economics

Yueping Song and Xiao-yuan Dong

Rural–urban labor migration has been a major feature of the Chinese economy since the mid 1990s. Increasingly, rural families have moved to the cities in search of better economic opportunities. However, migrant women confront many obstacles to entering the urban labor market; one of the main employment impediments for women with young children is the lack of access to affordable out-of-home childcare. Yueping Song and Xiao-yuan Dong empirically examine how childcare costs affect the decisions of migrant mothers who co-reside with preschool-age children, and their local counterparts in urban China.

Methodology. Song and Dong analyze the impact of childcare costs on the labor force participation (LFP) and childcare utilization of migrant and local mothers of preschool-age children in urban China using data from the 2010 National Dynamic Monitoring Survey of Floating Populations. They estimate the structural equations of LFP and childcare utilization of migrant and local mothers and compare their sensitivity to childcare costs and wages. The analysis addresses the issues of self-selection bias, including those stemming from migration decisions for migrant mothers.  

Main findings. Song and Dong show that childcare costs have a strong negative effect on LFP for both migrant and local mothers, and that the LFP decision of migrant mothers is more sensitive to changes in childcare costs than that of local mothers. These results suggest that the lack of access to affordable childcare represents a major deterrent to the LFP of migrant and local mothers, and that the effect is greater for migrant mothers than for local mothers.

The estimates also show that childcare costs have a strong negative effect on childcare utilization for both migrant and local mothers, and the childcare utilization of migrant mothers is less sensitive to changes in childcare costs than that of local mothers. While both migrant and local families of low socioeconomic status confront cost barriers to utilizing childcare services, the ability of migrant mothers to substitute for costly childcare services appears more limited, compared with local mothers.

Lastly, Song and Dong’s analysis finds that increases in the wage rate have a positive effect on the LFP and childcare utilization rates of both migrant and local mothers, and the wage elasticities of LFP and childcare utilization are larger for local mothers than migrant mothers. The low sensitivity of migrant mothers to changes in wages relative to local mothers is in line with the observation that the choices of the former in the labor and childcare markets are more constrained by non-economic restrictions than the latter.

Policy implications. Song and Dong’s results lend further support for the claim that the lack of access to affordable childcare programs presents a major employment impediment to migrant women with young children, and it not only contributes to perpetuating socioeconomic inequalities between migrants and local residents but also to transforming socioeconomic disadvantages from one generation to another. Thus, the authors call for policy measures to improve the accessibility and affordability of out-of-home childcare services for migrant and other low-income families in the cities. The provision of equal access to state-subsidized childcare services for all families should be a key aspect of the ongoing household registration reform and an essential feature of China’s new inclusive urbanization program.

 

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