The Effect of Housing Wealth on Labor Force Participation: Evidence from China

26 Pages Posted: 22 Feb 2016

See all articles by Shihe Fu

Shihe Fu

Xiamen University - The Wang Yanan Institute for Studies in Economics (WISE)

Yu Liao

Clark University - Department of Economics

Junfu Zhang

Clark University; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 16, 2016

Abstract

This paper uses the 2011 China Household Finance Survey data to estimate the effect of change in housing value on homeowners’ labor force participation. Using the average housing capital gains of other homes in the same community as an instrument for the housing capital gains of a given household, we find that a 100 thousand yuan increase in housing value leads to a 1.37 percentage point decrease in female homeowners’ probability of participating in the labor force and a 1.49 percentage point increase in their probability of becoming housewives. We find little effect on men’s labor force participation.

Keywords: Housing wealth effect, housing price, labor supply, labor force participation

JEL Classification: J21, J22, R20, R30

Suggested Citation

Fu, Shihe and Liao, Yu and Zhang, Junfu, The Effect of Housing Wealth on Labor Force Participation: Evidence from China (February 16, 2016). Available at SSRN: https://ssrn.com/abstract=2735293 or http://dx.doi.org/10.2139/ssrn.2735293

Shihe Fu (Contact Author)

Xiamen University - The Wang Yanan Institute for Studies in Economics (WISE) ( email )

A 307, Economics Building
Xiamen, Fujian 361005
China

Yu Liao

Clark University - Department of Economics ( email )

950 Main Street
Worcester, MA 01610
United States

Junfu Zhang

Clark University ( email )

950 Main Street
Worcester, MA 01610
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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