Effects of School Closure on Household Labor Supply: Evidence from Rural China

Abstract

This paper studies the effects of school closure on household labor supply exploiting China’s large-scale rural primary school closing during the early 2000s. Using the CHNS 1991-2006 and CHIP 2007-2008 datasets and a difference-in-differences approach, we find that school closure increases female total annual income by nearly 40 percent, which comes from increases in wage income. We further show that the significant positive impacts on female income are attributable to their migration responses: females tend to engage in temporary rural-urban migration to care for children following school closure. We find no effects on male income and migration decisions. Our findings support the unitary model of household.

Keywords: school closure, childcare, household labor supply, migration, rural China

JEL Classification: I25; I28; J22; J61