On China's Potential Labor Supply From a Micro Family Perspective

China's working-age population peaked in 2013. The aging population has a negative impact on supply-side production factors, and the labor supply potential will directly affect China's economic growth in the future. According to the calculations, by 2046-2050, China's potential labor supply will be reduced by 150 million compared with that in the "13th Five-Year Plan" period. The study focuses on many micro-institutional factors which affect labor supply potential and analyzes the micro-determination factors of China's future labor supply through the decision equation of labor participation rate and unemployment rate. It finds out that age, education, age structure of a family and property income of a family play a decisive role in the working decision. In particular, adults are more likely to withdraw from the labor market when the proportion of elderly and children in households is high. Therefore, a micro mechanism is suggested for the Chinese government. By reducing the burden of old-age care and children's education of a family, the individual labor supply decision will be changed, so as to improve the potential labor supply.