Abstract
Following the enactment of the Labour Law in 1995, China’s urban labour market witnessed a divergence in both gender wage gap and discrimination against female workers before 2007, and thereafter a convergence in both. Contributions of endowment differentials between male and female workers to wage gap were diminishing because of the consistent improvement in the female workers’ endowments. Discrimination against women, on the other hand, kept increasing and exceeded that of endowment differentials and eventually became the dominating contributor by 2002. Driven by the optimisation of female workers’ endowments, the execution of new labour market legislation, the transformation of previously limitless labour supply into shortage, as well as the reform of income distribution policies, a long-term trend of convergence in both gender wage gap and discrimination has been forming. China has been striding forward into a society with more equity and justice ever since 2007.
Highlights
Since the reform and opening up in 1978, the average economic growth rate in mainland China from 1980 to 2010 was about 9.75%, 9.99%, 10.29%, and 11.31%, much higher than the world average economic growth rate during the same period
Our research indicates that China’s urban labour market witnessed a divergence initially followed by convergence in both the gender wage gap and discrimination against female workers
Using four cross-sectional data from CHIPS 1995, 2002, 2007 and 2013, we explored the changing causes and trends of the gender wage gap and discrimination in urban China’s labour market employing Neumark and Appleton decomposition methodology
Summary
Since the reform and opening up in 1978, the average economic growth rate in mainland China from 1980 to 2010 was about 9.75%, 9.99%, 10.29%, and 11.31%, much higher than the world average economic growth rate during the same period. In 1997, state-owned enterprises launched a new wave of labour market reforms with the purpose of reducing inefficiency leading to 25.533 million workers being laid off in the following four years, which accounted for 23.7%1 of the total number of employees in state-owned enterprises in 1997. In 2007, the Standing Committee of the National People’s Congress passed the New Labour Contract Act that specified in detail both employer and employee behaviours in the making, changing and terminating of contracts. In 2013, the State Council issued the Several Opinions on Deepening Income Distribution Reform, which declared narrowing of the income gap as one of the four main reforming goals. Market-oriented reform in the employment system, with its goal of establishing an orderly, flexible, and effective labour market mechanism, was one of the most important moves in China’s economic transition. The ratio of female to male earnings has consistently been falling.
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