Abstract
The 1994–1998 housing reform in China allowed state employees to buy their rented public houses at considerably subsidized prices. By exploiting housing reform as an exogenous change in homeownership and employing a differences-in-differences framework, this paper examines the effect of housing reform on labor market participation. Using the data from China Health and Nutrition Survey, we find that individuals who are affected by the housing reform are 15.1 percentage points less likely to participate in labor market after controlling for observables. We further find that married women are 18.9 percentage points more likely to drop out of labor market after the housing reform, while their male counterparts are only 10.0 percentage points less likely to participate in labor market after the reform. We also explore mechanisms through which the housing reform may affect married women more greatly. Family division of labor hypothesis suggests that, in an efficient family husband should act as the “breadwinners” and wife be a caregiver and responsible for raising the family. We test this hypothesis and find strong evidence that married women in fact spend more time in family chores after the housing reform. Our findings are robust to alternative estimations and functional misspecifications.
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Notes
Work unit (danwei) generally refers to a specific kind of workplace in the context of state socialism where the workplace becomes an extension of the state apparatus and undertakes the function of social organization and control (Wu 1996).
This research uses data from China Health and Nutrition Survey (CHNS). We thank the National Institute for Nutrition and Health, China Center for Disease Control and Prevention, Carolina Population Center (P2C HD050924, T32 HD007168), the University of North Carolina at Chapel Hill, the NIH (R01-HD30880, DK056350, R24 HD050924, and R01-HD38700) and the NIH Fogarty International Center (D43 TW009077, D43 TW007709) for financial support for the CHNS data collection and analysis files from 1989 to 2015 and future surveys, and the China-Japan Friendship Hospital, Ministry of Health for support for CHNS 2009, Chinese National Human Genome Center at Shanghai since 2009, and Beijing Municipal Center for Disease Prevention and Control since 2011.
Visit the CHNS official website http://www.cpc.unc.edu/projects/china for detailed information about survey design, sample, data collection, quality control procedures and questionnaires.
We greatly appreciate Kelvin Wong for pointing this important issue out!
The fixed effects probit model will result in an incidental parameters problem (i.e., inconsistent coefficient estimates). By following Abrevaya (1997), we use the fixed-effects logit model to solve this “incidental parameters problem”.
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Acknowledgements
We wish to thank Kelvin Wong for his insightful comments and suggestions, which improve our paper significantly. Of course, all errors remain our own. In addition, Jie and Mingzhi are grateful for finanical support from the National Natural Science Foundation of China (No. 71974125, No. 71661137004, and No. 71774144), the Natural Science Foundation of Guangdong Province (No. 2020A1515010359), and the Major Research Project of Philosophy and Social Sciences of the Ministry of Education (18JZD033).
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Chen, J., Hu, M. & Lin, Z. China’s Housing Reform and Labor Market Participation. J Real Estate Finan Econ 67, 218–242 (2023). https://doi.org/10.1007/s11146-021-09827-3
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DOI: https://doi.org/10.1007/s11146-021-09827-3