Relative Pay of Domestic Eldercare Workers in Shanghai, China

ABSTRACT

Domestic services represent a growing sector of the economy in many high- and upper-middle income countries. Demand for domestic workers for eldercare is especially high as a result of the rapid aging of the population in these countries. However, domestic eldercare employment is characterized as a low-pay, low-status occupation worldwide. This article examines the relative pay of domestic eldercare workers in urban China and its underlying determinants. The estimates show that when holding observable individual characteristics constant, domestic eldercare workers earn 28 percent less than other types of workers in the service sector in Shanghai. The analysis attributes the low wages of eldercare workers to the fact that domestic paid work is culturally devalued, eldercare is performed by workers from the most marginalized segments of Shanghai's labor force, and the users of eldercare are relatively poor among the users of domestic services.

KEYWORDS:

• Domestic workers
• relative wage
• elder care
• China

JEL Codes:

• J31
• J70
• J18

ACKNOWLEDGMENTS

We are grateful to participants in “2013 IAFFE (International Association for Feminist Economics) annual conference” and participants in the “Workshop of Feminist Economics in China and India” in New Delhi for their valuable comments. This work is supported by the National Science Foundation of China (71273056; 71303150), the Ministry of Education of China (NCET-12-0133; 13YJC790188), the Shanghai Foundation of Philosophy & Social Science (2014EJB002), and the China Scholarship Council.

Notes

1 This figure is estimated based on the 2007 Shanghai Domestic Services Survey, which we will introduce later in the paper.

2 Source: People's Daily, September 3, 2009, http://www.chinanews.com/gn/news/2009/09-03/1847369.shtml.

3 To protect domestic workers, the 189 ILO Convention was adopted in 2013. As of 2015, the Convention has been ratified by 22 countries ; see https://en.wikipedia.org/wiki/Convention_on_Domestic_Workers.

4 See Gunseli Berik, Xiao-yuan Dong, and Gale Summerfield (2007) for a literature review on gender and economic transition in China.

5 These data are derived from the Surveillance Study on Migrant Workers, National Bureau of Statistics, 2012.

6 See http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/documents/publication/wcms_114261.pdf.

7 See http://www.12333sh.gov.cn/2009wza/gkxx/201104/t20110418_1129326.shtml.

8 Based on data from the China Statistical Yearbook (2011), http://www.stats.gov.cn/tjsj/ndsj/2011/indexch.htmhttp://www.stats.gov.cn/tjsj/ndsj/2011/indexch.htm. The number of participants in pension programs for enterprise workers was approximately 260 million, while the number of participants in pension programs for public employees was less than 10 million in 2010.

9 Based on data from China Statistical Yearbook (2009), http://www.stats.gov.cn/tjsj/ndsj/2009/indexch.htmhttp://www.stats.gov.cn/tjsj/ndsj/2009/indexch.htm.

10 Chen and Dong (2011) find that elderly people with a lower socioeconomic status receive less income transfers from adult children, all other things being equal. In the sample analyzed by Chen and Dong, women account for 73 percent of the elderly in need of care because women tend to outlive men. Gender gaps in life expectancy and access to employment-related provisions such as pensions and health insurance exacerbate the economic vulnerability of elderly women and reduce their ability to pay for care services.

11 All domestic workers are hourly workers. The use of hourly workers is more prevalent than that of live-in workers in Shanghai because most domestic service users do not have a large apartment to accommodate live-in domestic workers.

12 Rural migrants are those who hold rural hukou, and urban residents are those who hold urban hukou. We use “rural migrants and “rural hukou holders” interchangeably when presenting the empirical results.

13 Because a majority of domestic workers in the SDSS sample are not live-in workers, the in-kind compensation such as accommodations and food that these workers received is small.

14 We adopt a human capital approach to wage determination, with all the well-known limitations this approach brings about.

15 The CHIP sample for the wage regressions excludes observations for workers whose education is above the level of high school because there are no domestic workers with an educational attainment beyond this level in the SDSS sample.

16 Rural Shanghai hukou holders are rural migrants from the counties under the jurisdiction of the Shanghai municipal government.

17 When the variable for eldercare is excluded from the wage equation (1) presented in Table 6, the coefficient of the variable for the 50–70 age interval becomes statistically significant at the 10 percent level. To streamline the presentation, this wage regression is not presented.

18 Specifically, the average age of eldercare workers and other domestic workers is 49 and 39.8 years, respectively. The eldercare workers are less educated than other domestic workers and worked longer hours.

19 Interestingly, feminist scholars have contended that the altruistic nature of the work has made care workers such as school teachers and nurses reluctant to take job actions to seek better earnings for their work in Western, developed countries (Cameron Lynne MacDonald and David A. Merrill 2002).

Additional information

Notes on contributors

Xiao-yuan Dong

Xiao-yuan Dong is Professor of Economics at the University of Winnipeg in Canada and Adjunct Professor at Peking University in China. Her research focuses on the impacts of China's economic transition on labor and gender inequalities. A founding member and Co-director of the Chinese Women Economists Research Training Program at the National School of Development of Peking University, Dr. Dong has served on the board of directors of the International Association of Feminist Economics since 2007 and is an associate editor of Feminist Economics.

Jin Feng

Jin Feng is Professor of Economics at Fudan University in China. She is also a researcher in Employment and Social Security Research Center of Fudan University and Fudan Development Institute. Her research interests focus on eldercare, healthcare, social security reforms, and gender inequality. She is serving on the boards of Gerontological Society of Shanghai, Chinese Women Economists Society, and Committee of Undergraduate Study in Economics in Shanghai.

Yangyang Yu

Yangyang Yu is Assistant Professor of the School of Public Economics and Administration, Shanghai University of Finance and Economics. She is also Visiting Scholar at Duke University. Her research interests focuses on the labor supply of eldercare, aging, and health expenditure.