Home Production and Gender Gap in Structural Change

Cao, Huoqing and Chen, Chaoran and Xi, Xican (2026): Home Production and Gender Gap in Structural Change.

Abstract

We document that the gender gap in non-agricultural employment in developing countries is concentrated among rural married workers. Within-family specialization is central: married women devote more time to home production, supply fewer market hours, and are less likely to pay fixed costs to enter non-agriculture. We build a general equilibrium Roy model with joint family decisions, sector-neutral gender labor wedges, and entry barriers to non-agriculture. Calibrated to China in 2010, the model successfully reproduces the observed gender gap among married workers. Gender labor wedges account for about 80 percent of this gap, amplified significantly by within-family specialization. Changes in entry barriers explain the widening gap from 2000 to 2010, consistent with institutional changes in China.

• 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. (2025). Selection, absolute advantage, and the agricultural productivity gap. Journal of Political Economy Macroeconomics, forthcoming.

Alvarez-Cuadrado, F., Long, N. V., and Poschke, M. (2017). Capital-labor substitution, structural change and growth. Theoretical Economics, 12(3):1229-1266.

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.

Autor, D., Dorn, D., and Hanson, G. (2019). When work disappears: Manufacturing decline and the falling marriage market value of young men. American Economic Review: Insights, 1(2):161-78.

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.

Brandt, L. and Zhu, X. (2010). Accounting for China’s growth. Working Paper.

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, 57(3):753-776.

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.

Chen, T., Gu, J., Ngai, L. R., and Wang, J. (2025). Sowing Seeds of Mobility: The Uneven Impact of Land Reform. Working Paper.

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. (2025). Gender barriers, structural transformation, and economic development. Policy Research Working Paper Series 11083, The World Bank.

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.

Elgin, C., Kose, M. A., Ohnsorge, F., and Yu, S. (2021). Understanding informality. CEPR Discussion Paper, 16497.

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.

Fang, L. and Herrendorf, B. (2021). High-skilled services and development in China. Journal of Development Economics, 151:102671.

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. (2025). Rural pensions, labor reallocation, and aggregate income: An empirical and quantitative analysis of China. Econometrica, 93(5):1663-1696.

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.

Gottlieb, C., Doss, C., Gollin, D., and Poschke, M. (2025). The gender division of work across countries. IZA Discussion Paper, 16896.

Gousse, M., Jacquemet, N., and Robin, J.-M. (2017). Marriage, labor supply, and home production. Econometrica, 85(6):1873-1919.

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. (2023). Chapter 7: The great transition: Kuznets facts for family-economists. Handbook of Family Economics, 1:389-441.

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.

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., Rogerson, R., and Akos Valentinyi (2020). Structural change in investment and consumption---a unified analysis. Review of Economic Studies, 88(3):1311-1346.

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.

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.

Koh, Y., Li, J., Wu, Y., Yi, J., and Zhang, H. (2025). Young women in cities: Urbanization and gender-biased migration. Journal of Development Economics, 172:103378.

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, 134(664):3333-3359.

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.

Rendall, M. P. (2025). Brain versus brawn: The realization of women’s comparative advantage. Working Paper.

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.

Schoellman, T. (2020). Comment on “migration costs and observational returns to migration in the developing world”. Journal of Monetary Economics, 113:155-157.

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.

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.

Zhang, J. and Lu, C. (2019). A quantitative analysis on the reform of household registration in chinese cities. China Economic Quartertly, 18(4):1509-30.