Who cares? Childcare support and women’s labor supply in Hong Kong

Abstract

Prior research explored the individual contributions of grandparents, domestic workers, and preschool institutions in supporting maternal employment, yet few have examined them simultaneously. More importantly, the increasing diversity and multiplicity in childcare arrangement throughout different stages of childrearing has been largely overlooked. Utilizing data from the Hong Kong Panel Study of Social Dynamics (HKPSSD), this study examines the effects of diverse childcare combinations on women’s labor supply from a life course perspective. Our findings reveal that mothers with younger children are considerably less likely to remain in the workforce and work fewer hours than their childless counterparts. Nevertheless, grandparental co-residence, outsourcing and center-based care can all significantly alleviate such motherhood penalty, albeit to different extents. Notably, during the initial years of motherhood, solely relying on either grandparental care or center-based care yields limited effects, but these options become advantageous for mothers when paired with assistance from domestic workers. These findings highlight the potential for policy interventions that directly subsidize parents for marketized approaches to childcare, particularly in societies experiencing a decline in multigenerational households and rising costs for formal childcare.

Acknowledgement

We gratefully acknowledge funding support from the Labour and Welfare Bureau of the Hong Kong SAR Government (Consultancy Study on Considerations and Difficulties of Women in Choosing Whether or not to Work). The data used in this study was from the Hong Kong Panel Study of Social Dynamics (HKPSSD). The data collection was funded by the RGC- CPU Strategic Public Policy Research Scheme (HKUST6001- SPPR-08), the RGC Collaborative Research Fund (C6011-16GF), and the European Research Council Start-up Grant (ERC StG 716837) (PI: Xiaogang Wu). We thank the NYU-Shanghai Center for Applied Social and Economic Research (CASER) and Prof. Xiaogang Wu for granting us access to the data.

Notes

1 According to the requirement of Labor Department of Hong Kong, employers of foreign domestic worker need to provide them with suitable accommodation and with reasonable privacy (Labour Department 2022).

2 The Minimum Allowable Wage for FDHs in Hong Kong is HKD 4,630 (about USD 594) per month, which is significantly below the local wage in Hong Kong but well above the average wage in the sending countries.

3 Here, we only consider relatively young grandparents (those who aged 75 or below) as they are much more likely to be the provider rather than the receiver of family care.

4 We calculate monthly family income per capita as the monthly family income minus the respondent's monthly wage income divided by the number of household members.

5 The formula for conditional marginal effect calculation is as follows: $$\frac{\partial E\left(Y|Y>0,\mathrm{ }X\right)}{\partial X_j}={\beta }_j(1-\lambda (\frac{\beta X}{\sigma }\left)\right[\frac{\beta X}{\sigma }+\lambda \left(\frac{\beta X}{\sigma }\right)\left]\right)$$

where $\varphi$ is standard normal cumulative density function, $\lambda$ is the ratio between the standard normal probability density function and cumulative density function, and $\sigma$ is the standard error of the error term.

6 The impact of various childcare support options on women’s labor supply may vary by mothers’ socioeconomic status (He and Wu 2019). Our supplementary analysis indicates that the sole assistance provided by co-residing grandparents had a more significant impact on the labor supply of mothers with less than an upper secondary education. By contrast, mothers who had completed upper secondary or tertiary education saw greater benefits in terms of their labor supply from hiring domestic workers, regardless of whether they lived with their children’s grandparents. Due to space constraints, the results are not included here but can be provided upon request.

Additional information

Notes on contributors

Duoduo Xu

Duoduo Xu, Assistant Professor, Department of Sociology, University of Hong Kong.

Jiao Guo

Jiao Guo, PhD student, Department of Sociology, University of Hong Kong.

Karen Ka Han Li

Karen Ka Han Li, PhD student, Department of Social Work and Social Administration, University of Hong Kong.

Lucy P. Jordan

Lucy P. Jordan, Associate Professor, Department of Social Work and Social Administration, University of Hong Kong.