Publication
Lee, H., Zhao, K. and Zou, F. (2022) "Does the Early Retirement Policy Really Benefit Women?" Journal of Economic Behavior and Organization. (196) 330-345
China adopts mandatory early retirement for women, which requires women to retire and start to collect public pension benefit five years earlier than men. The conventional wisdom behind this policy is that the early retirement benefits women by relieving them from work earlier than men and providing them with more years of public pension benefits and leisure. I argue that the early retirement policy may also have negative effects on individual welfare. By removing the early retirement policy, women are benefited through three channels: the tax rate deduction, the partial indexation policy and the mortality risk reduction. I develop an Overlapping-Generation model with heterogeneous agents and incomplete markets and use it to evaluate the welfare implications of the early retirement policy for women. I calibrate the model to the Chinese economy. My quantitative results show that the early retirement age policy for women in China reduces welfare for both men and women. Furthermore, the increase in the female retirement age has two opposite effects on the saving behaviors of the female agents depending on the level of the replacement rate. The welfare gain of the implementation of the equal retirement age policy depends on the economic growth rate. At last, I discuss the potential impact of the skewed gender ratio among the young Chinese.
Working Papers
Zou, F. & Shi, L (2025) Changes in the Life-Cycle Earnings of Chinese Workers: The Role of Education, Gender and Economic Reform
This study estimates the earning profiles of Chinese workers, examining differences by gender and education level, and explores how these profiles have evolved over time. Using micro-level panel data from the China Health and Nutrition Survey, we apply the classical wage equation to assess earning profiles before and after the 1997 economic reforms. Our findings reveal that the earnings profiles of low-educated workers have remained flat since 1997, while those of high-educated workers have steepened. Additionally, the gender pay gap has decreased for high-educated workers but increased for low-educated workers. We also observe a negative relationship between initial wages and wage growth rates. Further, workers who dropped out of the labor force after the 1997 reforms tend to have lower skill levels and flatter earnings profiles. This study contributes to the understanding of the dynamics of earnings profiles in China’s fast-growing economy and improves the accuracy of the calibration of macroeconomic models by refining the prediction of future earnings.
Zou, F. (2024) The Impact of Skewed Gender Ratio on the Chinese Economy with the Social Security Program
Since 1990s, for each 100 girls born, there are 115 boys born in China. This paper studies this demographic change on the Chinese economy. I build an overlapping generation model and calibrate it into the Chinese in 2010 before the young generation with skewed gender ratio enters the labor market. I compare this benchmark economy to a counter-factual economy where the generation with skewed gender ratio replaces the whole population. I find the counter-factual economy is more productive because of three mechanisms: first, men make more income than women; second, more men receive college educated than women; third, there are less female workers who retire earlier than the male workers. In addition, because of the early retirement age policy for women, the social security program becomes smaller in the counter-factual economy.
Zou, F. and Kim, J (2024) "How Does Joint Custody Reform Influence Satisfaction of Family Life?"
Since the end of the 20th century, there has been a gradual custody law reform from single parenting (usually solo parenting by the mother) to the joint parenting system in most European countries. The previous research mainly focused on the welfare of the children in this reform. In this study, we concentrate on how the joint custody reform affects the satisfaction of the parents. This provides us an opportunity to study the influence of bargaining power within a family. Intuitively, the party with more bargaining power dominates in a negotiation, and therefore, achieves a favorable deal. When joint custody replaces single parenting, the bargaining power shifts from the mother toward the father. Hence, the satisfaction of the mother should decrease and the satisfaction of the father should increase. However, we find that joint custody reform increases family satisfaction by 48% for both mothers and fathers. The result indicates that marriage is not a simple zero-sum game. A more balanced bargaining power improves satisfaction for both spouses in marriage.
Work in Progress
Zou, F. (2018) The Effect of Social Security on the Black Americans
The purpose of this paper is to quantitatively determine the welfare effect of the Social Security program on the black Americans comparing to the white Americans. On one hand, the Social Security program benefits the black American less comparing to the average white Americans because of three reasons. First, the black Americans contribute larger proportion of their income to the Social Security program. Second, they claim fewer years of the Social Security benefit because of the shorter life expectancy. Third, they enter labor force earlier and make more years of contribution to the Social Security program. On the other hand, the Social Security system benefit the black American more, because they claim higher Social Security benefit relative to their average lifetime income since on average the black Americans have lower income. I build an overlapping generation model that captures the demographic and socioeconomic characteristics of black and white Americans using PSID data from 1968 to 2015. The benchmark model is calibrate to 2015 U.S. economy. I compare the benchmark economy to a counter-factual economy where the Social Security program does not exist.
Conference
Department of Economics, Louisiana State University
Presented, Mid-West Macroeconomics Meeting, 2017