Family in China: later marriage, spousal bargaining and intra-household decision making

Bao, Kun (2020) Family in China: later marriage, spousal bargaining and intra-household decision making. PhD thesis, University of Nottingham.

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The family is the basic socio-economic unit for society, as it is regarded as crucial to organise income generation, allocate resources to its members and provide emotional and welfare support among many other activities. Despite major changes over time and enormous variations across social and economic environments, the family remains the most influential of all institutions. Through the analysis of the family, one could not only gain a thorough understanding of the social change but also give a scientific prediction of an individual’s economic behaviour. Therefore, whether in the field of Economics or Sociology, the study of the family is getting more and more attention.

Marriage forms the initial relationship of a family. The basic function of marriage is to act as a fertility system aiming to prolong human continuity. In ancient times, a majority of marriages are arranged by feudal patriarchal in order to resist the uncertainty and limited information brought about by the affiliation with unfamiliar families. With the advent of the market-oriented economy and the transition to modern society, individuals obtained more and more decision power, and economic incentives are becoming increasingly important in the process of marital decision-making. Drawing on the definition from Family Economists: marriage is now a voluntary partnership for the purpose of joint production and consumption. Hence, the rationale of analysing marriage and family is changing over time. The models of family decision making no longer treat the household as a single decision-making entity but emphasise the impact of the bargaining process between spouses. Thus, the approaches analysing household behaviour become far more complex than before, since the trajectory of the family could vary differently across diverse social backgrounds and cultural settings.

China is known for its universal and stable marriage. However, there are new trends in China, such as later marriage, rising divorce rates, decreasing fertility, and shrinking family size. Although these changes are not as dramatic as those in the west, they could have significant implications on demographic structure and economic development, due to the huge overall population in China. Hence, it is of great value to investigate these changes and to propose valuable suggestions. But which model would be the best to analyse the modern Chinese family? On the one hand, from the perspective of cultural heritage, China has a long history of the traditional Confucian culture that still plays a role in modern times. Given this context, the Unitary model emphasising household as a single decision-making entity may be appropriate to describe the Chinese family, because the husband who is the head of household arranges resource allocation and the preference of the family reflects the common goal set by the household head.

On the other hand, from the perspective of modernization, marriage in modern China is losing its function as a result of the high levels of marketization since the reform and opening up in 1978. Most of the gains from marriage, such as division of labour and risking pooling, could be achieved without marrying others because nearly all services are provided by the market or by governments. In the meantime, women’s social status is substantially enhanced through the narrowed gap between men's and women’s years of schooling, and women’s increasing participation in the labour market. Chinese women have more bargaining power both when choosing partners before marriage and when negotiating with their spouses within a marriage. In this case, the Collective framework would be best to describe the Chinese family, thus explaining the mechanism of spousal bargaining.

Moreover, due to the vast territory, the pace of socio-economic transformation is different from region to region. There is a huge gap exists between rural and urban areas, coastal and non-coastal areas, in terms of the speed of urbanization, the coverage of the social security system and the modernity of cultural values. Therefore, it is very difficult to conclude whether the Chinese family today is modern or traditional. It is also impossible to apply a one-size-fits-all model to analyse marriage and family in China.

In addition, people’s family life has also experienced severe intervention from the government. The one-child policy is one of the best examples, leading to a sharp decline in fertility and an aging population nowadays. China also experienced massive population migration after the relaxation of the “hukou” system, which significantly impacts the family structure and caused social problems such as empty-nest families and leftover children. Hence, when analysing Chinese marriage and family, these particular features should not be ignored.

Although not all social issues related to marriage in China can be covered in a thesis, we choose three typical topics to give a thorough investigation, which hopefully contributes to the study of marriage and intra-household decision making in China.

Marriage formation is a starting point to study marriage and family. As an indicator of social change, the determinants of marriage timing have been investigated by numerous studies due to their important implications for fertility and population aging. Given the context of China, with its dramatic economic growth and rapid social change, we suggest that the modernity of family values will affect an individual’s decision of when to get married, as suggested by both the modernization theory and the Second Demographic Transition theory. However, the relationship between ideational change toward the family and the delay of marriage has been under-investigated. Unlike previous studies utilizing public values to analyse the trend of marriage delay at an aggregate level, the first paper investigates the determinants of the individual’s late first marriage by including individual-level attitudes toward traditional family values as an explanatory factor, using the 2014 wave of the Chinese Family Panel Study (CFPS). Our main findings suggest a significant positive impact of holding less traditional family-related attitudes on the probability of having a late first marriage. It is worth noting that this positive effect is more statistically significant for women’s marriage timing compared to men’s, and for urban areas compared to rural areas. When looking at the heterogeneous effects across different education levels and regions with different economic development, a significant positive effect is found between the score for family-related attitudes and the late first marriage status for both men and women in the region with highest GDP level, and only for women with the highest education level. Consistent with Becker’s specialization model, the impact of socio-economic factors shows opposite effects for men and women on the probability of having a late first marriage. This research demonstrates that ideational change toward family values boosts age at first marriage, while socioeconomic factors are also important parts of the picture. Since this paper provides a new perspective for understanding the determinants of marriage delay, policymakers in China or in other societies with a similar cultural background may benefit from our findings.

The second paper is inspired by the rapidly aging population and the care needs of the vulnerable oldest-olds. Given the central role in the Chinese culture of the family supporting older generations and the lack of publicly provided health support in China, the elderly often rely on their children for both care and financial assistance. Although the motives of intergenerational transfer have been explained by several models, scholars have overlooked the situation where most of the adult children are married and how much support for parents is jointly decided by spouses. Following the idea that spousal bargaining power affects married couples’ transfer to both paternal and maternal elderly parents, the second paper tested Ham and Song’s (2014) Two-stage Bargaining model by providing empirical evidence from China. Using the China Health and Retirement Longitudinal Study (CHARLS) dataset, this paper finds a significant positive relationship between the relative bargaining power of the husband (wife) and the share of the couple’s amount of transfer toward the husband’s (wife’s) parents. This positive effect is found to be more sizable and statistically significant in urban areas compared to rural areas, and for high-income households compared to relatively low-income households. Moreover, besides the share of transfer, we also explored other forms of transfer such as the transfer pattern (whether transferred or not, transferred to whom) and the actual amount of transfer to both sets of parents respectively. The results are consistent with the baseline findings. The second paper has several contributions. First, the focus on Chinese households is motivated by family-based elderly care and a rapidly aging society. In this regard, this paper provides a novel contribution to the literature on family economics in China, helping to merge the study of elderly support with works on household bargaining. Second, our study provides more comprehensive evidence of the impact of spousal bargaining power by exploring three bargaining outcomes regarding the upward transfer, compared with previous studies which only consider one of the outcomes. Finally, as we find a new determinant of intergenerational transfer to elderly parents, this paper has important policy implications for developing countries such as China, where the elderly lack publicly provided social support and rely on family for help.

The third paper is inspired by the new marriage law in 2011. Our research question is: how do couples react to this marital shock? Accounting for 70% percent of family wealth on average, the house is one of the most important household assets in the Chinese family. However, most of the residential properties in China are owned by men. This, by and large, comes from the Chinese marriage custom that the man or his family buys the house, and the woman or her family provide the dowry. Previously, there existed no problem, as the family home had been considered joint property regardless of under whose name it was registered and whether it had been bought before or after marriage. However, the implementation of the new marriage law in 2011 potentially changed the distribution of family wealth between spouses, transferring the wife’s part of property ownership to the husband. Due to the disproportionate benefits upon divorce, the wife may feel less secure and reduce her investments in marital-specific goods, thus leading to a problem of limited commitment between spouses. Although many studies have demonstrated it can induce a reduction of a couple’s investment in marriage-specific capital, housing property appears to be an exception due to its function of insurance. In this paper, we propose that the married couple may adopt two strategies: changing the status of house ownership and investment in more houses. The first strategy could directly offset the influence brought about by the legal change, while the second strategy makes houses serve as a “commitment device” for the husband and provide insurance and incentives to his wife. Using the CFPS 2010-2016 dataset, this paper adopts a Fuzzy DID strategy to identify the impact of the new marriage law by employing the local 5-14 female/male sex ratio in 2000 at county-level as the continuous variable to measure the intensity of the treatment. We found that there are significant positive effects of the legal shock on the couple’s reactions both in terms of changing the property ownership and investing in more houses. The results show robustness after conducting various analyses of heterogeneity and placebo tests. The third paper is the first to empirically examine how married couples will react to the marital instability brought about by China’s new marriage law. The findings in this paper suggest the change of marriage law may have additional outcomes. The indirect effects should not be ignored by policymakers when designing policies.

As with most studies on these topics, our research is also limited in some ways. First, the dataset we use has a limited length of period, which posits challenges in avoiding estimation bias. Second, although various measurements of bargaining power are employed in this thesis, it still fails to find a perfect one to reflect the true position of each spouse in the marriage. Third, the contribution of this thesis is insufficient at the theoretical level. Future work may benefit from utilising longitudinal data with a longer period and extending the theoretical models of former scholars.

Item Type: Thesis (University of Nottingham only) (PhD)
Supervisors: Song, Lina
Zhang, Jing
Keywords: Later marriage; Spousal bargaining; Intra-Household Decision Making; Families, China
Subjects: H Social sciences > HQ The family. Marriage. Woman
Faculties/Schools: UK Campuses > Faculty of Social Sciences, Law and Education > Nottingham University Business School
Item ID: 59883
Depositing User: Bao, Kun
Date Deposited: 31 Jul 2020 04:40
Last Modified: 31 Jul 2020 04:40

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