How caring for grandchildren and elderly parents affects labor force participation of middle-aged people in China

Shangyi Mao, Peking University

Using the China Health and Retirement Longitudinal Study (CHARLS) baseline data, we explore to what extent taking care of grandchildren and old parents influences middle-aged people's work status. we find that conditional on socioeconomic and demographic characteristics, taking care for grandchildren has a negative effect on mid-aged people’s labor supply, particularly it has more negative effect on women than men. Caring for parent has no significant effect on men’s labor supply, but it has significant positive effect on women’s supply. When we use instrument variables approach to handle endogenous problem, we can find a causal explanation of the effect of caring for parents and grandchildren on labor supply.