Author(s)

Ruimin Su

Corresponding Author

Ruimin Su

Abstract

This paper studies the effect of pension on grown child’s labor force participation exploiting a source of exogenous variability in pension caused by the policy. The age of parents was used as the instrumental variable of their pension to identity the effect of pension on the labor force participation of their children. It was found that: pension significantly increased the labor force participation of children, especially daughters; Pensions significantly increased the participation of children with a junior high school degree, but had no significant effect on the participation of children with a college degree or above. The finding in this paper shows that there is no evidence prove pension may encourage “dependent generation”, on the contrary, it will free up the children to labor market.

Keywords

Pension; Child’s labor force participation; IV-Probit