Yafeng Wang and Chuanchuan Zhang
In many developing countries, much of the care burden is informal and unpaid and is the responsibility of women family members. The burden of informal care work that disproportionately falls on women has substantial implications for gender relations and inequalities. While there is a growing body of literature on informal care, few studies pay attention to one particular group of caregivers: women and men near retirement age. Using data from the 2011 national baseline survey of the China Health and Retirement Longitudinal Study (CHARLS), Yafeng Wang and Chuanchuan Zhang examine the impact of caregiving, including grandchild care and eldercare, on labor supply and earnings among women and men 45–64 years old living in China’s urban areas.
Methodology. Wang and Zhang first use the conventional ordinary least squares (OLS) method to estimate the impacts of grandchild care and eldercare on labor force participation, paid working hours, and labor earnings. They run all regressions separately for women and men, and thus are able to identify any different effects between men and women. Acknowledging possible endogenous bias of their OLS estimator, they employ the instrumental variable (IV) approach for robustness checks.
Main findings. Wang and Zhang’s descriptive analysis shows that women spend substantially less time on paid work and earn less than men. Meanwhile, women spend substantially more time on grandchild care than men. Their regression results show that grandchild care is negatively associated with both women’s and men’s labor force participation, while there are no effects for eldercare. For women caregivers, caring for grandchildren substantially lowers paid labor hours compared to non-caregivers, while caring for both grandchildren and the elderly is associated with longer paid labor hours compared to non-caregivers. They find no significant relationships between eldercare and paid labor hours of women workers. For men workers, neither grandchild care nor eldercare is significantly associated with labor hours. Their OLS estimation results show a substantially negative relationship between grandchild care and the labor earnings of women caregivers, but the relationship is not precisely estimated in the IV regressions. They find no statistically significant relationships between grandchild care and labor earnings for men.
Policy implications. Wang and Zhang’s findings suggest that the Chinese government’s ongoing reform of its retirement system, which aims to encourage older workers to remain in the labor force, conflicts with the increasing care burdens that have fallen on older people. Without well-developed care systems, postponing the age of retirement may remove family care burdens from older people to mothers with young children and, thus, decrease the labor supply of young caregivers. The net labor supply effect of postponing retirement age at the macro level is ambiguous. One recent study has already shown that the presence of grandparents as family caregivers increases the labor supply of young women (Maurer-Fazio et al. 2011). In addition, the early withdrawal of middle-age and elderly people from the labor force and the earnings loss resulting from family care responsibilities would result in smaller pensions. Thus, the market-oriented care system reforms are incompatible with concerns over increasing old-age support. Recognizing such policy conflicts, the government needs comprehensive policies to take into account both care system reform and retirement system reform.
Maurer-Fazio, Margaret, Rachel Connelly, Lan Chen, and Lixin Tang. 2011. “Childcare, Eldercare, and Labor Force Participation of Married Women in Urban China, 1982–2000.” Journal of Human Resources 46(2): 261–94.