Housing Wealth and Urban Household Labor Supply: Findings from China Household Finance Survey

Based on the data from the China Household Finance Survey (CHFS), this paper selects instrumental variables to conduct an empirical analysis of the impact of housing wealth on the labor participation decisions and labor time of family members. The research results show that an increase in housing wealth significantly reduces the probability of family members' labor participation, also reduces their labor time, and decreases the labor participation of both men and women. Moreover, housing appreciation significantly reduces the number of family workers and the proportion of working people among the eligible labor force. The study also found that housing appreciation has a greater impact on the labor participation of individuals in first-and second-tier cities and high-income groups, but has a smaller impact on the labor participation rate of individuals with higher education. Further analysis revealed that the negative impact of housing appreciation on labor participation strengthens with age. Both the residential and investment functions of housing can significantly reduce the probability of family members' labor participation, and investment-oriented housing has a greater effect on the labor participation of family members. The labor participation decisions of families without their own housing are not affected. The results of the estimation after replacing variables, selecting other IVs, and selecting samples of married women show that the research conclusion is robust. The conclusion of this paper indicates that housing wealth has a significant inhibitory effect on the labor supply of family members. The formulation and adjustment of relevant policies need to fully consider the potential impact of housing on labor supply.