From Motherhood Premium to Motherhood Penalty? Heterogeneous Effects - PDF document

From Motherhood Premium to Motherhood Penalty? Heterogeneous Effects of Motherhood Stages on Women’s Economic Outcomes in Urban China Menghan Zhao Population Studies Center, University of Pennsylvania Abstract Women’s deteriorating position in the labor market after China’s economic reform has been documented in recent literature. However, few studies connect the relationship between the presence of children at different ages and women’s labor market outcomes with the local labor market development. Capitalizing on longitudinal data, this study uses person-fixed-effects model to investigate the relationship between different motherhood stages and married women’s economic outcomes in urban China, and considers how this relationship varies with the development of local labor market. We find that very young children inhibit mothers’ labor activity, whereas mothers’ income is positively correlated with the presence of children at school age. Our analysis further suggests that with the development of local labor market, the negative association between very young children and women’s labor activity is exaggerated, while the positive relationship between children at school age and mothers’ economic outcomes is eroded. Findings also contribute to the literature that connects the labor market institution, gender-role ideology and women’s adjustment of economic activities to their childbearing and childrearing obligations. Keywords Gender-role ideology; Economic reform; Urban Chinese women; Development of local labor market 1

From Motherhood Premium to Motherhood Penalty? Heterogeneous Effects of Motherhood Stages on Women’s Economic Outcomes in Urban China Introduction Recently, the variation of the relationship between fertility and women’s economic activities across different socioeconomic contexts, related policy regimes and the gender equity levels have been documented (Brinton and Lee 2016; Esping-Andersen and Billari 2015; McDonald 2000; Rindfuss, Choe, and Brauner-Otto 2016) . Typically, in an economically advanced society, which has more egalitarian division of labor within households and public policies that make it easier for women to combine the worker and mother roles, tends to have higher fertility rate. How the relationship between fertility and women’s labor force participation evolves with the economic development in China, however, has been less studied. Over the past three decades, China has witnessed an unprecedented pace of economic development and remarkable social changes. It has transitioned from a poor, centralized socialist economy to the worlds’ second largest economy and the ‘workshop of the world’ through promoting marketization. Meanwhile, growing income inequality during China’s rapid economic development in recent decades has been documented in many studies (Hauser and Xie 2005; Xie and Hannum 1996; Xie and Wu 2008; Xiang Zhou 2014; Xueguang Zhou 2000). Specifically, with the changes in the nature of employment, there are growing gender disparities in the labor market (Zhang and Hannum 2015). We suggest that China presents an interesting setting for the analysis of the interrelation 2

of fertility, women’s economic activities, gender-role ideology and the changes of economic and political institutions. First, at the height of the socialist period before the market transition, unemployment was an unknown phenomenon in China and the economic activity rate of women used to be at a high level that can hardly be surpassed. This, with the economic transition, leads to a decline of women’s economic activities, a trend that differs from most developed nations where female labor force participation rates and income increased rapidly during the process of industrialization (Goldin 2006). Second, though sharing common economic and political institutions prior to transition, the differences in trajectories of transitions across the former Soviet Bloc and other socialist societies have become more pronounced over time (Brainerd 2000; Heyns 2005). Instead of embracing the idea of capitalism and institutional arrangements that promised convergence with the West, China achieved its development by gradually experimenting with market mechanism. Also, the underlying fertility and family changes in China differs from the former socialist societies. China implemented strict birth control and experienced a rapid fertility transition from a fertility level higher than 6 in 1960s to below- replacement level in 1990s, comparing to a fertility level lower than 3 in 1960s in most Soviet Bloc societies (UNPD 2015) and even pronatalist policies during socialist era (Sobotka et al. 2008) . Based on these reasons, we suggest that studying how the relationship between fertility and Chinese women’s economic activity changes with the evolving labor market may contribute to the extant literature that connects the socioeconomic institution to the relationship between fertility and women’s labor force participation. 3

In early studies, Chinese women were characterized by continuous employment because of the state intervention in promoting female labor force participation, whereas there is a growth of gender inequality in economic outcomes after China’s economic reform (Fincher 2016). This is partly because the traditional gender-role ideologies and gender divisions within household still persists (Lu and Zhang 2016; Zuo and Bian 2001). Child care is one responsibility that women retain and women continue to shoulder responsibility for most domestic work. This traditional gendered labor division tends to lower women’s labor force participation during the plan-to-market economic style transition when the more gender-egalitarian state sectors have retreated (Hare 2016; Zhang and Hannum 2015). Women’s perceptions of discrimination also rise among those who enter the labor market after market reforms (Parish and Busse 2000). As estimated in previous literature, the statistical discrimination against female workers leads to two-thirds of the gender gap in payment (Xiu and Gunderson 2013), which accounts for much higher proportion for migrant workers (Min et al. 2016). Studies also suggested that, after China’s economic reform, urban women’s disadvantages in both the labor market and within the family mutually reinforce each other (Ji et al. 2017). However, previous studies on the relationship between women’s economic outcomes and children have rarely taken into account the heterogeneous relationship between different motherhood stages and women’s economic activities. Even fewer studies try to link this relationship to the development of the local labor market after 1990s, which is a period with profound socioeconomic and institutional changes in mainland China. Capitalizing on data from 4

a longitudinal survey, this study uses the person-fixed-effects model to examine how urban Chinese women’s economic outcomes are related with different motherhood stages in recent decades. Specifically, we try to link this relationship with the development of local labor market. This study yields two significant findings. First, women’s labor force participation is closely related with different stages of motherhood. Young children exert an inhibiting effects on mothers’ economic activity, whereas the presence of children at school age is positively related with mothers’ income. Second, the negative correlation between young children and mothers’ involvement in the labor activity is exaggerated with the development of local labor market and the positive relationship between children at school age and women’s economic outcomes is eroded. Policy implications are also discussed. Motherhood and Women’s Economic Activities Since the end of World War II, women’s educational attainment and labor force participation have increased globally (Charles 2011), which coincided with a decline in human fertility. Though the causal mechanisms linking fertility to women’s labor market remain elusive, the association between fertility and women’s labor force activity reflects the challenges of balancing work and family that typifies industrialized societies. At individual level, the negative impacts of children on women’s economic outcomes have long been empirically observed and called ‘motherhood penalty’ (Angrist and Evans 1998; Budig and England 2001; Waldfogel 1997) . Based on the comparative advantages of men and women, the economic model of within- household specialization posits a gendered labor division with the higher wage spouse (usually 5