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on China |
| By: | Li, Hongbin (Tsinghua University); Yi, Junjian (National University of Singapore); Zhang, Junsen (Chinese University of Hong Kong) |
| Abstract: | This paper tests the effects of fertility on household structure and parental labor supply in rural China. To solve the endogeneity problem, we use a unique survey on households with twin children and a comparison group of non-twin households. The ordinary least squares estimates show a negative correlation between fertility and parental labor supply. Using twinning as a natural experiment, we do not find evidence on the negative effects of fertility on parental labor supply. By contrast, we find that the twinning-induced increase in fertility enhances significantly the coresidence of grandparents. The results remain robust when we use the Chinese 1990 population census. We suggest that the negative effects of fertility on parental labor supply are mitigated by the childcare provided by grandparents. Our results have important implications for population and public childcare policies. |
| Keywords: | fertility, parental labor supply, household structure |
| JEL: | J13 J18 J22 O10 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9342&r=all |
| By: | Connelly, Rachel (Bowdoin College); Maurer-Fazio, Margaret (Bates College) |
| Abstract: | This paper considers the work to "retirement" transitions of the rural elders in China who reside in seven regions with substantial minority populations. The data employed, those of the China Household Ethnicity Survey, are ideal for examining the effect of cultural differences on this key lifecycle event, the reduction of market-oriented work with age. Membership in particular ethnic minority groups is used to proxy the potential differences in the culture of aging and caregiving. We find that beyond education, the strongest predictors of labor force participation for China's rural elders are age, disability, widowhood, and ethnic minority status. The effects of ethnic minority group status on labor force participation are robust and the differences in participation among ethnic groups are sometimes large. It is thus misleading, in the analysis of the labor force participation of China's rural elders, to simply dichotomize ethnic minority and majority (Han) group membership. Further careful research is needed to help understand the differences in perceptions of aging among China's rural ethnic minority groups. |
| Keywords: | ethnicity, retirement, labor force participation, elders, aging, China Household Ethnicity Survey |
| JEL: | J14 J15 J16 J26 D13 O53 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9343&r=all |
| By: | Yi Xue (University of International Business and Economics); Xiaochuan Xing (Tsinghua University); Alexander Karaivanov (Simon Fraser University) |
| Abstract: | Survey data from CFPAM, the leading joint-liability microfinance lender in China, indicate that nearly 70% of all borrower groups in the sample are `bogus' -- that is, one person uses all loans given to group members in a single investment project while all other group members act as unproductive cosigners. This practice not only violates CFPAM rules but is also inconsistent with the majority of the theoretical literature on group lending, a basic tenet of which is that each borrower uses their own loan to implement their own investment project (what we call `standard' group). We therefore extend the classic model of group lending under joint liability by explicitly allowing for both standard and bogus groups in a setting with the possibility of strategic default due to limited enforcement. The optimal choice between standard and bogus groups is endogenous and depends on the borrowers' characteristics (project productivity and probability of success). We analyze the optimal group loan contract (or menu of contracts) and show that bogus groups optimally arise when either the productivity differential between the projects in a group is high (in heterogeneous groups), or when the absolute level of project productivity is high (in homogeneous groups). Explicitly allowing for the possibility of bogus groups not only helps the lender avoid losses which would occur if their presence is ignored, but also enhances productive efficiency and borrower welfare in the economy. We test the model predictions with data from rural China and evaluate the welfare gains from implementing the optimal contract (or menu) relative to the benchmarks of: (a) lenders operating unaware of bogus groups or (b) lenders using a contract that endogenously rules out bogus group formation. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:728&r=all |
| By: | Theodore H. Moran (Peterson Institute for International Economics) |
| Abstract: | For more than a decade, China has complained about what it maintains has been a pattern of erratic and politicized treatment of Chinese investors when they attempt to acquire US companies. The Chinese want the Committee on Foreign Investment in the United States (CFIUS) to be more open and transparent in its rulings and to not discriminate against Chinese firms. The United States is not likely to accede to these demands in any formal or legal manner. Moran proposes practical steps to address the concerns of Chinese investors without diluting CFIUS procedures. He provides a national security threat assessment filter, which allows Chinese investors—like investors of all nationalities—to determine when their proposed acquisitions might pose a genuine threat and when any such threat is simply not plausible. He also suggests that first-time Chinese investors seek expert counsel to overcome the secrecy surrounding CFIUS objections to figure out how to proceed with problematic acquisitions. |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb15-17&r=all |