Gender gap in working span, employment, and labor productivity

Abstract

The sex-differential retirement age policy in China results in a shorter working span of 5–10 years for women than for men. Using a transferable utility model, we document that this gender gap negatively impacts employment and labor productivity. Delaying women’s retirement to 55–60 years would increase urban employment by 0.43–0.80 percentage points and improve labor productivity by 13%–22%. However, such reforms could disrupt young mothers’ careers, as grandmothers play an important role in childcare. Our counterfactual simulations show that if 10% of young mothers with two children quit their jobs, it could decrease aggregate output by 6.11%. Therefore, improving public childcare services is crucial to support the transition of postponing women’s retirement.