Are Spousal Labor Supplies Substitutes? Evidence from the Workweek Reduction Policy in China

46 Pages Posted: 21 Nov 2016 Last revised: 7 Aug 2019

See all articles by Yueyuan Ma

Yueyuan Ma

University of Pennsylvania, School of Arts & Sciences, Department of Economics, Student

Xinzheng Shi

Tsinghua University - School of Economics & Management

Date Written: July 2019

Abstract

We estimate the effects of spousal labor supply on individuals’ labor supply by using the 1994–1995 initiation of China’s workweek reduction policy as a natural experiment. We find that an increase in the labor supply of wives significantly reduced the labor supply of husbands, but an increase in the labor supply of husbands had an insignificantly negative effect on that of their wives. Furthermore, an increase in the labor supply of one spouse increased the amount of time spent on housework for both the husband and wife. Our findings on the substitution effect between the labor supplies of spouses differ from findings based on data from developed countries. The findings of this study suggest that more resources are needed to achieve the goals set by governments in developing countries.

Keywords: Workweek Reduction, Spousal Labor Supply, Market Time, Housework

JEL Classification: J22, J13, J18

Suggested Citation

Ma, Yueyuan and Shi, Xinzheng, Are Spousal Labor Supplies Substitutes? Evidence from the Workweek Reduction Policy in China (July 2019). Available at SSRN: https://ssrn.com/abstract=2872996 or http://dx.doi.org/10.2139/ssrn.2872996

Yueyuan Ma

University of Pennsylvania, School of Arts & Sciences, Department of Economics, Student ( email )

160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104
United States

Xinzheng Shi (Contact Author)

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

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