Do Chinese Vehicle Restrictions Reduce Female Employment?

WASHINGTON—In 2011, Beijing’s government imposed sharp restrictions on vehicle ownership, similar to a number of other cities such as Shanghai and Singapore, in order to curb notorious problems of air pollution and vehicle congestion. Beijing’s policy has effectively reduced vehicle ownership, but a new study posted today by Resources for the Future (RFF) suggests that Beijing’s policy may create problems for another important social goal: closing the gap between male and female employment rates.

In this new study, The Effect of Vehicle Restrictions on Female Labor Supply, authors Antung A. Liu of Indiana University, Senior Fellow Joshua Linn of Resources for the Future, Ping Qin of Renmin University of China, and Jun Yang of Beijing Jiaotong University are the first to look at the labor market consequences of vehicle restrictions. The authors show in their new paper that restricting cars has created costs that have been borne disproportionately on women.

They find that eliminating a car reduces employment for women without children by 11 percent, and has a negative, although statistically insignificant, effect on women with children. They also find that car ownership has little effect on male employment.

The authors state of their findings, “The most important policy implication of this work is that the labor market effects of vehicle restrictions be mitigated, most directly through policies targeted at the primary group affected: women without children. For example, expansions in public transportation could be directed at areas with businesses employing concentrations of these women. Alternatively, labor tax incentives could be deployed precisely targeting those women without cars or children.”

Read the full paper: The Effect of Vehicle Restrictions on Female Labor Supply.