Abstract: Based on China’s monthly urban household survey （UHS） from 2010 to 2012， this paper empirically tests the effect of unemployment rate fluctuation on employees’ consumption and spousal labor supply. The results show that： ① 1% increase in the grouped unemployment rate would lead to 0.48% reduction in households’ consumption growth. That is, unemployment expectation will cause significant pre-cautionary saving. ②In terms of the heterogeneity of ownership structure， 1% increase in the grouped unemployment rate would not statistically significantly affect the consumption growth for those who work in state -owned， collectively -owned or joint-stock firms， whereas there will be 0.5% and 1.22% reduction in consumption growth for those who have no fixed jobs or those who work in private enterprises. ③In terms of the heterogeneity in ages， the consumption growth for those who are near to retirement is not sensitive to the grouped unemployment rate. For those aged between 26 and 35 （or aged between 36 and 50）， 1% increase in the grouped unemployment rate would respectively lead to the 0.49% （0.35% ） reduction in consumption growth. ④ 1% increase in the grouped unemployment rate would lead to the 8.13% probability increase in terms of spousal labor supply. Meanwhile， the single-families’ consumptions growth rate will decrease statistically significantly by 0.69% indicating that the getting marriage could provide some sorts of self-insurance. This paper has far reaching implications to the assessment of China’s unemployment insurance， interpretation of the constraining factors for China’s low consumption rate as well as the adjustment of China’s labor market structure during business cycles.
Key Words： unemployment rate fluctuations； consumption response； spousal labor supply
The Chinese version appeared in China Industrial Economics, 2019(02).