Are Spousal Labor Supplies Substitutes? Evidence from the Workweek Reduction Policy in China
46 Pages Posted: 21 Nov 2016 Last revised: 7 Aug 2019
Date Written: July 2019
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: Suggested Citation