Where did the time go? The effects of China's two-day weekend policy on labor supply, household work, and wages

Research on the effect of working time policy yields ambiguous results. The outcome depends on the tradeoff between leisure, consumption, and wage-earning opportunities. Using China Health and Nutrition Survey (CHNS) data over the 1993–2000 period, we study the effects of China's Two-Day Weekend Policy, which legislatively changed weekly working days from six to five in May 1995, on labor supply, household work, and wages. The results show that the Chinese policy significantly reduced the weekly work hours of affected workers by four hours, increased the probability of having a second job by 14 percentage points, decreased the time spent on household work, and increased their monthly real wages by 30%.