Grandparental childcare, maternal labor force participation, and the birth of a second child: Further knowledge from empirical analysis

Abstract The declining birth rate in China highlights the need for a better understanding of the relationship between fertility decisions, maternal labor supply, and grandparenting. Drawing on the China Migrants Dynamic Survey, our analysis finds that grandparental childcare of the first child has a positive and significant effect on the second birth, regardless of whether the mother participates in the labor market. Notably, a mediation analysis demonstrates the mediating effect of maternal labor force participation, which negatively impacts having a second child. Grandparenting for the first child indirectly restrains the second birth through promoting maternal employment. However, childcare by grandparents can significantly alleviate the incompatibility of the mothers’ time allocation and thus shows a more substantial positive, direct impact on the second birth. Given the insufficient supply of affordable and quality childcare services in China, our findings indicate that grandparental childcare is a practical way to boost fertility and maternal labor supply.