A Study On The Impact Of Comprehensive Two Child Policy On China’s Labor Supply

In view of the continuous development of China’s aging degree,the comprehensive two-child policy began to be fully implemented in 2016.Comprehensive two child policy can promote the long-term increase of labor supply.However,there is a long time lag from the introduction of the comprehensive two-child policy to the formation of the second child labor market,so some scholars doubt what impact the birth peak will have on the short-term supply of labor during this time lag.The empirical test of the impact of the comprehensive two-child policy on China’s short-term labor supply is conducive to the overall arrangement of the implementation steps of China’s future family planning policy.According to Becker’s family time allocation theory and role conflict theory,the comprehensive two-child policy will change the family’s fertility decision-making,and affect labor supply through five paths: income effect,substitution effect,leisure effect,workplace discrimination effect and attrition effect.Based on the micro data of CFPS,this paper constructs a double difference model,and finds that the labor supply in China has a significant increasing trend after the implementation of the comprehensive two-child policy.It also finds that the policy impact of the comprehensive two-child policy on the labor supply is mainly aimed at the middle-aged and elderly women with low educational background,and mainly appears in Western China However,for young and middle-aged people of childbearing age,the impact of the policy is not significant.Further research shows that: the policy has a stronger income effect on low-income families,while it has a stronger substitution effect and leisure effect on high-income families;people with higher social status before and after the policy are more reluctant to increase family income by increasing labor supply.From the current situation,the family economic pressure brought by the second child birth is mostly transferred to the middle-aged and elderly people.This is due to the high level of labor participation of young and middle-aged people in China,it is difficult to increase labor supply,and the intergenerational relationship of Chinese families is close,so the middle-aged and old people bear the consumption pressure brought by family fertility.Moreover,families with low economic strength and social status are more likely to be affected by policies.To sum up,the two-child policy has a great positive impact on the middle-aged and elderly people,and has a weak impact on the labor supply of the young and middle-aged people,while it has almost no impact on the young people under the age of 20.The previous theoretical prediction that the policy may bring about the phenomenon of female employment discrimination is not reflected in the empirical,which shows that the protection of female employment in China is very in place.This dispels the previous academic concern that the comprehensive two-child policy may inhibit labor supply in the short term.However,we should also see that the labor reserve force with the middle-aged and the elderly as the main force is limited,so if the fertility rate rises to a fairly high level,the promotion effect of the increase of fertility on labor supply will be reduced until it completely disappears or reversed.