Home Production and Gender Gap in Structural Change

Cao, Huoqing and Chen, Chaoran and Xi, Xican (2025): Home Production and Gender Gap in Structural Change.

Abstract

We document that the gender gap in non-agricultural work in developing countries exists primarily among rural married workers, not singles. Married women spend more time on home production, making them less likely to pursue non-agricultural employment. We extend a general equilibrium Roy model to incorporate the joint labor supply decisions of rural married couples, accounting for gender-specific labor distortions and entry barriers to non-agriculture. Calibrating the model to China, we find that the gender gap in non-agricultural employment can be largely explained by gender differences in home production and labor market distortions. Furthermore, within-household specialization among married couples greatly amplifies the effects of gender-specific labor distortions, and changes in entry barriers to non-agriculture widened the gender gap in China between 2000 and 2010. Enhancing public services such as childcare facilities can effectively induce more married women to work in non-agriculture. Extrapolating our model globally, it explains a quarter of the variation in the gender gap across countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: structural transformation, gender gap, home production, within-family specialization, occupational choice
• Subjects: E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E13 - Neoclassical; J - Labor and Demographic Economics > J1 - Demographic Economics > J11 - Demographic Trends, Macroeconomic Effects, and Forecasts; J - Labor and Demographic Economics > J1 - Demographic Economics > J16 - Economics of Gender ; Non-labor Discrimination; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models

References

Adamopoulos, T., Brandt, L., Chen, C., Restuccia, D., and Wei, X. (2024). Land security and mobility frictions. Quarterly Journal of Economics, 139(3):1941-1987.

Adamopoulos, T., Brandt, L., Leight, J., and Restuccia, D. (2022). Misallocation, selection, and productivity: A quantitative analysis with micro data from China. Econometrica, 90(3):1261-1282.

Adamopoulos, T. and Restuccia, D. (2014). The size distribution of farms and international productivity differences. American Economic Review, 104(6):1667-1697.

Alder, S., Boppart, T., and Muller, A. (2022). A theory of structural change that can fit the data. American Economic Journal: Macroeconomics, 14(2):160-206.

Alvarez-Cuadrado, F., Amodio, F., and Poschke, M. (2023). Selection, absolute advantage, and the agricultural productivity gap. Working Paper.

Alvarez-Cuadrado, F. and Poschke, M. (2011). Structural change out of agriculture: Labor push versus labor pull. American Economic Journal: Macroeconomics, 3(3):127-58.

Bento, P., Shao, L., and Sohail, F. (2024). Gender gaps in time use and entrepreneurship. Working Paper.

Bertrand, M., Goldin, C., and Katz, L. F. (2010). Dynamics of the gender gap for young professionals in the financial and corporate sectors. American Economic Journal: Applied Economics, 2(3):228-255.

Bick, A. and Fuchs-Schundeln, N. (2018). Taxation and labour supply of married couples across countries: A macroeconomic analysis. Review of Economic Studies, 85(3):1543-1576.

Bick, A., Fuchs-Schundeln, N., Lagakos, D., and Tsujiyama, H. (2022). Structural change in labor supply and cross-country differences in hours worked. Journal of Monetary Economics, 130:68-85.

Blundell, R., Costa Dias, M., Meghir, C., and Shaw, J. (2016). Female labor supply, human capital, and welfare reform. Econometrica, 84(5):1705-1753.

Boppart, T. (2014). Structural change and the Kaldor facts in a growth model with relative price effects and non-Gorman preferences. Econometrica, 82(6):2167-2196.

Bratti, M., Frattini, T., and Scervini, F. (2018). Grandparental availability for child care and maternal labor force participation: Pension reform evidence from Italy. Journal of Population Economics, 31:1239-1277.

Bridgman, B., Duernecker, G., and Herrendorf, B. (2018). Structural transformation, marketization, and household production around the world. Journal of Development Economics, 133:102-126.

Brooks, W., Donovan, K., and Johnson, T. (2023). From Micro to Macro in an Equilibrium Diffusion Model . Working Paper.

Browning, M. (1992). Children and household economic behavior. Journal of Economic Literature, 30(3):1434-1475.

Bustos, P., Caprettini, B., and Ponticelli, J. (2016). Agricultural Productivity and Structural Transformation: Evidence from Brazil. American Economic Review, 106(6):1320-1365.

Cao, H., Chen, C., Xi, X., and Zuo, S. X. (2024). Family migration and structural transformation. Canadian Journal of Economics, forthcoming.

Caselli, F. (2005). Accounting for cross-country income differences. In Aghion, P. and Durlauf, S. N., editors, Handbook of Economic Growth, volume 1A, chapter 9, pages 679-741. Elsevier B. V., North Holland.

Caunedo, J. and Kala, N. (2021). Mechanizing agriculture. Working Paper 29061, National Bureau of Economic Research.

Chan, K. W. (2019). China’s hukou system at 60: Continuity and reform. In Handbook on Urban Development in China, pages 59-79. Edward Elgar Publishing.

Chen, C. (2017). Untitled land, occupational choice, and agricultural productivity. American Economic Journal: Macroeconomics, 9(4):91-121.

Chen, C. (2020). Technology adoption, capital deepening, and international productivity differences. Journal of Development Economics, 143:102388.

Chetty, R. (2012). Bounds on elasticities with optimization frictions: A synthesis of micro and macro evidence on labor supply. Econometrica, 80(3):969-1018.

Chinese Center for Disease Control and Prevention (2010). China Health and Nutrition Survey [dataset]. unpublished data.

Chiplunkar, G. and Kleineberg, T. (2023). Gender barriers, structural transformation, and economic development. Working Paper.

Compton, J. and Pollak, R. A. (2014). Family proximity, childcare, and women’s labor force attachment. Journal of Urban Economics, 79:72-90.

Dinkelman, T. and Ngai, L. R. (2021). Home production, women’s market work, and structural transformation. STEG Pathfinding Paper.

Doepke, M. and Tertilt, M. (2016). Families in macroeconomics. Handbook of Macroeconomics, 2:1789-1891.

Doss, C., Gollin, D., Gottlieb, C., and Poschke, M. (2024). The gender division of work across countries. Working Paper.

Erosa, A., Fuster, L., Kambourov, G., and Rogerson, R. (2022). Hours, occupations, and gender differences in labor market outcomes. American Economic Journal: Macroeconomics, 14(3):543-90.

Feenstra, R. C., Inklaar, R., and Timmer, M. P. (2015). The next generation of the Penn World Table. American Economic Review, 105(10):3150-3182.

Feng, Y., Ren, J., and Rendall, M. (2024). The reversal of the gender education gap with economic development. Working Paper.

Gai, Q., Guo, N., Li, B., Shi, Q., and Zhu, X. (2021). Migration costs, sorting, and the agricultural productivity gap. Working Paper.

Gollin, D., Lagakos, D., and Waugh, M. E. (2014a). Agricultural productivity differences across countries. American Economic Review: Papers and Proceedings, 104(5):165-170.

Gollin, D., Lagakos, D., and Waugh, M. E. (2014b). The agricultural productivity gap. Quarterly Journal of Economics, 129(2):939-993.

Gollin, D., Parente, S. L., and Rogerson, R. (2004). Farm work, home work and international productivity differences. Review of Economic Dynamics, 7(4):827-850.

Greenwood, J., Guner, N., Kocharkov, G., and Santos, C. (2014). Marry your like: Assortative mating and income inequality. American Economic Review, 104(5):348-53.

Greenwood, J., Guner, N., and Marto, R. (2022). The great transition: Kuznets facts for family-economists. Handbook of Family Economics, forthcoming.

Greenwood, J., Guner, N., and Vandenbroucke, G. (2017). Family economics writ large. Journal of Economic Literature, 55(4):1346-1434.

Guner, N., Kaygusuz, R., and Ventura, G. (2012). Taxation and household labour supply. Review of Economic Studies, 79(3):1113-1149.

Hamory, J., Kleemans, M., Li, N. Y., and Miguel, E. (2021). Reevaluating agricultural productivity gaps with longitudinal microdata. Journal of the European Economic Association, 19(3):1522-1555.

Hansen, G. D. (1985). Indivisible labor and the business cycle. Journal of Monetary Economics, 16(3):309-327.

Hao, T., Sun, R., Tombe, T., and Zhu, X. (2020). The effect of migration policy on growth, structural change, and regional inequality in China. Journal of Monetary Economics, 113:112-134.

Herrendorf, B. and Schoellman, T. (2015). Why is measured productivity so low in agriculture? Review of Economic Dynamics, 18(4):1003-1022.

Herrendorf, B. and Schoellman, T. (2018). Wages, human capital, and barriers to structural transformation. American Economic Journal: Macroeconomics, 10(2):1-23.

Herrendorf, B. and Valentinyi, A. (2012). Which sectors make poor countries so unproductive? Journal of the European Economic Association, 10(2):323-341.

Hojman, A. and Lopez Boo, F. (2019). Cost-effective public daycare in a low-income economy benefits children and mothers. IZA Discussion Paper.

Hsieh, C.-T., Hurst, E., Jones, C. I., and Klenow, P. J. (2019). The allocation of talent and U.S. economic growth. Econometrica, 87(5):1439-1474.

ICF (2004-2017). Demographic and Health Surveys (various) [datasets], funded by USAID. Rockville, Maryland: ICF [distributor]. published data.

International Labour Organization (2024). ILO modelled estimates database, ILOSTAT [database]. Available from https://ilostat.ilo.org/data/.

Kleven, H., Landais, C., and Sogaard, J. E. (2019). Children and gender inequality: Evidence from Denmark. American Economic Journal: Applied Economics, 11(4):181-209.

Kongsamut, P., Rebelo, S., and Xie, D. (2001). Beyond balanced growth. Review of Economic Studies, 68(4):869-882.

Lagakos, D., Marshall, S., Mobarak, A. M., Vernot, C., and Waugh, M. E. (2020). Migration costs and observational returns to migration in the developing world. Journal of Monetary Economics, 113:138-154.

Lagakos, D. and Waugh, M. E. (2013). Selection, agriculture, and cross-country productivity differences. American Economic Review, 103(2):948-980.

Lee, M. (2024). Allocation of female talent and cross-country productivity differences. Economic Journal, forthcoming.

Liu, X. and Zuo, S. X. (2023). From equality to polarization: Changes in urban China’s gender earnings gap from 1988 to 2016. Journal of Economic Behavior & Organization, 205:303-337.

Marcos, M. A. T. (2023). Grandmothers and the gender gap in the Mexican labor market. Journal of Development Economics, 162:103013.

Martinez, C. and Perticara, M. (2017). Childcare effects on maternal employment: Evidence from Chile. Journal of Development Economics, 126:127-137.

McClelland, R. and Mok, S. (2012). A review of recent research on labor supply elasticities. Working Paper.

Moro, A., Moslehi, S., and Tanaka, S. (2017). Does home production drive structural transformation? American Economic Journal: Macroeconomics, 9(3):116-46.

National Bureau of Statistics of China (2008). Time Use Survey [dataset]. published data.

National Bureau of Statistics of China (2010). China Population Census [dataset]. unpublished data.

National Bureau of Statistics of China (2011). China Statistical Yearbook [dataset]. published data.

National Bureau of Statistics of China (2015). Chinese Urban Household Survey, 1986-2015 [dataset]. unpublished data.

National Health Commission of China (2018). China Migrants Dynamic Survey [dataset]. unpublished data.

Ngai, L. R. and Petrongolo, B. (2017). Gender gaps and the rise of the service economy. American Economic Journal: Macroeconomics, 9(4):1-44.

Ngai, L. R. and Pissarides, C. A. (2007). Structural change in a multisector model of growth. American Economic Review, 97(1):429-443.

Pencavel, J. (1986). Chapter 1 labor supply of men: A survey. volume 1 of Handbook of Labor Economics, pages 3-102. Elsevier.

Prescott, E. C. (2004). Why do Americans work so much more than Europeans? Federal Reserve Bank of Minneapolis Quarterly Review, 28(July):2-13.

Prescott, E. C., Rogerson, R., and Wallenius, J. (2009). Lifetime aggregate labor supply with endogenous workweek length. Review of Economic Dynamics, 12(1):23-36.

Research Center for Rural Economy, Ministry of Agriculture (China) (2016). Rural Fixed Point Survey [dataset]. unpublished data.

Restuccia, D., Yang, D. T., and Zhu, X. (2008). Agriculture and aggregate productivity: A quantitative cross-country analysis. Journal of Monetary Economics, 55(2):234-250.

Rogerson, R. (1988). Indivisible labor, lotteries and equilibrium. Journal of Monetary Economics, 21(1):3-16.

Rogerson, R. (2008). Structural transformation and the deterioration of European labor market outcomes. Journal of Political Economy, 116(2):235-259.

Rogerson, R. and Wallenius, J. (2009). Micro and macro elasticities in a life cycle model with taxes. Journal of Economic Theory, 144(6):2277-2292.

Rogerson, R. and Wallenius, J. (2019). Household time use among older couples: Evidence and implications for labor supply parameters. The Quarterly Journal of Economics, 134(2):1079-1120.

Ruggles, S., Cleveland, L., Lovaton, R., Sarkar, S., Sobek, M., Burk, D., Ehrlich, D., Heimann, Q., and Lee, J. (2024). Integrated Public Use Microdata Series, International: Version 7.5 [dataset]. published data.

Siow, A. (2015). Testing Becker’s theory of positive assortative matching. Journal of Labor Economics, 33(2):409-441.

Song, Y. (2014). What should economists know about the current Chinese hukou system? China Economic Review, 29:200-212.

The World Bank (2024). World Development Indicators [dataset]. Washington, D.C.: The World Bank (producer and distributor). published data.

Tian, Y. (2024). International Trade Liberalization and Domestic Institutional Reform: Effects of WTO Accession on Chinese Internal Migration Policy. The Review of Economics and Statistics, 106(3):794-813.

United States Bureau of Labor Statistics (2010). American Time Use Survey (ATUS), 2010 [dataset]. published data.

Vollrath, D. (2009). How important are dual economy effects for aggregate productivity? Journal of Development Economics, 88(2):325-334.

Xing, C. (2008). Nongmin gong yu chengzhen zhigong de shouru chaju (in chinese). Management World, 2008(5):55-64.

Yang, D. T. and Zhu, X. (2013). Modernization of agriculture and long-term growth. Journal of Monetary Economics, 60(3):367-382.

Young, A. (2013). Inequality, the urban-rural gap, and migration. The Quarterly Journal of Economics, 128(4):1727-1785.

Zanella, G. (2017). How does grandparent childcare affect labor supply? IZA World of Labor.