Academic journal article The Journal of East Asian Affairs

Gender Difference in Employment and Income in China's Labor Market

Academic journal article The Journal of East Asian Affairs

Gender Difference in Employment and Income in China's Labor Market

Article excerpt

Abstract

The purpose of this article is to analyze the gender differences in employment and income in China's labor market. Using data from the China Household Income Project (CHIP), this paper identifies the roles of human capital, political capital and other individual characteristics in explaining gender gaps in China's labor market. The data shows that women are lagging behind men in measures of human capital, especially work experience and political capital. After controlling for a set of individual characteristics, this paper finds that the gender gap in employment and income still exists. Closing the gender gap in China's labor market requires "enlightened government policies which take gender dimensions into account" (OECD 2008) on all fronts.

Keywords: Gender differences, Employment, Income, Chinese labor market

INTRODUCTION

The purpose of this article is to analyze the gender differences in employment and income in China's labor market. Over the last several decades, gender issues have attained increased prominence in economic research. There is a growing body of evidence linking gender issues in policy to equitable and sustainable outcomes in economic development. The education of women, for example, is known as a key source of long-term economic growth as it enhances productivity and returns to investment. The better utilization of female workers leads to many positive consequences such as the reduction in poverty, the increase in economic growth and social well-being, and the promotion of sustainable development (OECD 2008).

The economic growth resulting from the increase in the education of women creates a continuous investment in human capital leading to higher productivity. Accordingly, much policy effort was exerted to enhance the education of women (World Bank 2012). One of the policies to promote women's education attainment is to offer fair compensation in employment opportunities and income commensurate with female workers' qualifications and their human capital.

In the context of the importance of women's status in the labor market, China's case on gender inequality has attracted much research attention due to its massive labor force and large-scale economic reforms (Chen, Ge, Lai and Wan 2013). In this paper, I used a large data set from the third round of the China Household Income Project (CHIP) compiled in 2002 to investigate if gender differences in employment and income exist in China's labor market.

This research contributes to the literature by analyzing a data set that contains a large number of observations with detailed individual human capital and other characteristics that are believed to affect the labor market outcomes. This research also looks into the impact of political capital and ethnicity on the gender gap in employment and wages in China's labor market. The empirical findings will shed light on the roles of these characteristics by explaining the gender differences in labor market outcomes in China. Given the rapid market reform and ascendancy of China in the global economic landscape, the findings of this paper can be used to improve our understanding of the labor markets of other economies in transition.

Experiences from other major economies1 suggest that gender issues in China's labor market have important implications. Since China is the world's most populous country, China's gender inequality will inevitably become an important empirical research topic since it can highlight factors affecting the economic reform on the largest workforce in the world. Undoubtedly, China's experience will have significant implications for other transitional economies (Shen and Deng 2008) as emerging markets have become increasingly integrated in the global economy.

Since its market opened to the world in 1978, China has undergone a series of rapid economic reform processes. Having surpassed Japan as the world's second largest economy in the second quarter of 2010, China has attained the spotlight as a rising super power in the global economy. …

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