China’s labour market liberalization harmed women, but more so in regions with traditional gender norms

Abstract

China’s labour market liberalization since the early 1980s coincided with rapid economic growth but also to a decline in female labour force participation (LFP). We examine how persistent gender norms influenced this decline, exploiting provincial variation in the staggered rollout of the labour contract system. Local gender norms are proxied by the historical density of patrilineal genealogy books. Using a difference-in-differences-in-differences design, we find that traditional gender norms amplify the negative impact of labour market liberalization on women’s LFP. A one-standard-deviation increase in norms lowers female LFP by an additional 3.4 percentage points relative to men, while women in the top quartile of gender norms experience an 8.3-percentage-point greater decline. Event-study evidence shows that these effects are concentrated among women in high-norm regions, whereas men’s LFP remains largely unaffected. Our results highlight how cultural persistence can condition the labour market consequences of major economic reforms.