Scared Away: Credit Demand Response to Expected Motherhood Penalty in the Labor Market

Speaker: QIAN Wenlan, Director of the NUS Institute of Real Estate and Urban Studies (IREUS)

Venue: School of Economics, Room 530, Zijingang Campus

Time: June 22nd, 14:00-15:30

Abstract: We exploit a policy reform that exogenously deteriorates mothers’ job prospects. China switched from a one-child policy to two-child in 2016, which increased female workers’childbearing and caring responsibilities. Using a leading peer-to-peer lending platform targeting college students in China, we find that loan applications from female college students decrease by 15.6% relative to male students after the reform. The drop sug[1]gests that female students can anticipate the poorer future job prospects; they reduce their expenditure and invest less in human capital accordingly. Applications for long[1]term and large-amount loans and loans for human capital investment purpose experi[1]ence the largest decline. We also find that loan applications decrease after provincial governments’ staggered extension of maternity leaves and that the decrease is more prominent when the expected motherhood penalty is greater. The results are unlikely driven by credit supply channels.