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Bivariate probit analysis of differences between male and female formal employment in urban China

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  • Chen, Guifu
  • Hamori, Shigeyuki

Abstract

Using the 2004 and 2006 pooling data from the China Health and Nutrition Survey (CHNS) questionnaire, this paper studies the differences between male and female employment in urban China, taking into account the interdependence between the decision of women to participate in the workforce and the formal hiring decisions of organizations. We take into account this interdependence issue using a bivariate probit model. When certain unobserved factors are ignored that may otherwise influence both the decision of women to participate in the workforce and the formal recruitment decisions of organizations, the results denote that the estimated coefficients of the equation corresponding to the formal hiring of female employees are inconsistent. On the other hand, the results indicate that the conditional formal employment probability of women, which can be obtained through a censored bivariate probit from an all-female sample, was about 3% lower than the unconditional probability obtained through a univariate probit from a sample of only labor market participants. Moreover, the results show that the formal employment probability differential (between males and females), owing to discrimination, will be overestimated in the case of a univariate probit model.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 21 (2010)
Issue (Month): 5 (October)
Pages: 494-501

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Handle: RePEc:eee:asieco:v:21:y:2010:i:5:p:494-501

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Keywords: Male-female formal employment differentials Bivariate probit model Chinese labor market;

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  1. Heywood, John S & Mohanty, Madhu S, 1995. "Estimation of the US Federal Job Queue in Presence of an Endogenous Union Queue," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 62(248), pages 479-93, November.
  2. Abowd, John M & Killingsworth, Mark R, 1984. "Do Minority-White Unemployment Differences Really Exist?," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 2(1), pages 64-72, January.
  3. Poirier, Dale J., 1980. "Partial observability in bivariate probit models," Journal of Econometrics, Elsevier, Elsevier, vol. 12(2), pages 209-217, February.
  4. Meng, Chun-Lo & Schmidt, Peter, 1985. "On the Cost of Partial Observability in the Bivariate Probit Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(1), pages 71-85, February.
  5. repec:ebl:ecbull:v:10:y:2008:i:14:p:1-17 is not listed on IDEAS
  6. Madhu Mohanty, 1998. "Do US employers discriminate against females when hiring their employees?," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 30(11), pages 1471-1482.
  7. Johnson, Janet L, 1983. "Sex Differentials in Unemployment Rates: A Case for No Concern," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 91(2), pages 293-303, April.
  8. Madhu Mohanty, 2002. "A bivariate probit approach to the determination of employment: a study of teen employment differentials in Los Angeles County," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 34(2), pages 143-156.
  9. John M. Abowd & Henry S. Farber, 1982. "Job queues and the union status of workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 35(3), pages 354-367, April.
  10. CHEN, Guifu & HAMORI, Shigeyuki, 2009. "Economic returns to schooling in urban China: OLS and the instrumental variables approach," China Economic Review, Elsevier, Elsevier, vol. 20(2), pages 143-152, June.
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