Retirement policy, employment status, and gender pay gap in urban China

Abstract

China’s current retirement policy has been in effect since 1978. The legal retirement age is 50 years for female workers, 55 years for female cadres, and 60 years for male cadres and workers; women can retire 5 or 10 years earlier than men. This difference in legal retirement age may affect wage growth in those approaching retirement. Based on China’s Urban Household Survey data set, this study investigated the influence of retirement age differences on the gender pay gap. From age 30 to 49 years, the wage difference between female workers and cadres increased by approximately 15 % more than that of men. After consideration of possible endogeneity problems and demonstration of the robustness of the regression results, the study determined that such differences were likely caused by gender and identity differences at retirement age. Among workers and cadres, the retirement age policy exacerbated gender differences in wages through working hours, wage rate, career promotion, and job change activity in those approaching retirement.