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Analysis of Gender Wage Differential in China's Urban Labor Market

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  • Su, Biwei

    () (Korea University)

  • Heshmati, Almas

    () (Jönköping University, Sogang University)

Abstract

This paper estimates the gender wage gap and its composition in China's urban labor market using the 2009 survey data from the Chinese Family Panel Studies. Several estimation and decomposition methods have been used and compared. First, we examine the gender wage gap using ordinary least square regression method with a gender dummy variable. Then, we apply Oaxaca (1973) decomposition method with different weighting systems to analyze the logarithmic wage differential. To be more specific, we prove the existence of sample selection bias caused by the female's labor force participation. We eliminate it by using the Heckman's two-step procedure. Empirical results reveal that male workers generally receive a higher wage than female workers, and a great deal of this difference is unexplained. Meanwhile, this unexplained part, which is usually referred to as discrimination turns out to be higher when the adjustment is made for the selection bias. A further breakdown of the wage gap shows that among all the individual characteristics, occupations explain the largest share of the wage gap, followed by their working experience. On the other hand, education acts as a contributor for discrimination in the labor market.

Suggested Citation

  • Su, Biwei & Heshmati, Almas, 2011. "Analysis of Gender Wage Differential in China's Urban Labor Market," IZA Discussion Papers 6252, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6252
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    1. repec:bla:worlde:v:40:y:2017:i:10:p:2056-2077 is not listed on IDEAS
    2. Theresa M. Greaney & Yao Li, 2017. "Examining Determinants of Foreign Wage Premiums in China," The World Economy, Wiley Blackwell, vol. 40(10), pages 2056-2077, October.
    3. Cai, Lixin & Liu, Amy Y.C., 2015. "Wage determination and distribution in urban China and Vietnam: A comparative analysis," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 186-203.
    4. Theresa M. Greaney & Yao Li, 2013. "Trade, Foreign Direct Investment and Wage Inequality in China: A Heterogeneous Firms Approach," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-49.

    More about this item

    Keywords

    decomposition; wage gap; discrimination; gender; Chinese labor market;

    JEL classification:

    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)

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