Market Transition and Gender Gap in Earnings in Urban China

Abstract

In this article, we examine the relationship between market transition and gender gap in earnings in urban China. We analyze change in the gender gap in human capital, political capital, labor-force placement, and family structure; change in the amount of monetary return to these determinants; and the changing significance of these sources of influence. We do so by analyzing two national samples from the 1988 and 1995 Chinese Household Income Project (CHIP) and city-level data for 1995. We found no longitudinal change nor city-level variation in the gender gap in earnings. Despite this stability, the proportion of the gender gap in earnings attributable to education and occupational segregation increased over time. This change is disproportional, occurring largely only in the most marketized cities. In these highly marketized cities, the significance of market-related mechanisms — education and occupation and industry-placement — has increased, while the contribution of redistribution-related mechanisms — affiliation with the state sector, party membership, and seniority — has decreased. These changes indicate that the Chinese market transition is a nonlinear, cumulative process.