Does International Co-Residence Promote Female Labor Participation: Evidence Based on Eastern Provinces in China

Ke Shen, Fudan University
Huashuai Chen, Duke University

Based on the data of middle-aged women and their elderly parents in Chinese eastern provinces, this article explores whether and how co-residence with parents influences female labor supply, taking into account of the endogeneity for living arrangement. A two-stage instrumental variable estimation shows that women co-residing with elderly parents, especially with mothers, are much more likely to participate in labor market and to increase working hours. A major reason is that co-residence allows women to reduce the burden of household work through the assistance of their parents, thereby freeing up time for market work. Our findings indicate that the decline in intergenerational co-residence partly accounts for the larger decrease in female labor force participation rate since 1990.