The impact of informal care from children to their elderly parents on self-employment? Evidence from China

China is facing a demographic shift that the proportion of elderly is growing, and providing informal care to elderly people is important in explaining "labor market discrimination", where reducing willingness to be selfemployed is the core. Although earlier studies examined the informal care and labor participation nexus, few analyzed the effects of informal care on self-employment from perspective of opportunity cost and intergenerational support simultaneously. We first develop a theoretical model, predicting that informal care can bring both cost effect and support effect on self-employment. The predictions are then confirmed using dataset collected from Chinese General Social Survey. Particularly, the inhibition of informal care is more pronounced in the group that are women, having a working spouse, living in rural area and having young children. Thus, China needs to take additional steps to overcome the barriers keeping the elderly from enjoying pension assistance.