Gender Earnings Inequality in Reform-Era Urban China

This paper analyzes data from the 2005 population mini-census and prefecture-level statistics to investigate the trend in gender earnings inequality and the driving forces behind the trend in reform-era urban China. We pay special attention to the different impacts of marketization and economic development on gender earnings inequality. Cross-sectoral analyses show that the gender earnings gap is smallest in government and public institutions and increases for more marketized sectors. At the prefectural level, we match the mini-census data with prefecture-level statistics and differentiate the effect of economic development from that of marketization. Multi-level analyses show that marketization and economic development affect gender inequality in different ways: the market force has exacerbated gender earnings inequality, whereas economic development has reduced it. Overall, marketization appears to be the main driver of the increasing gender earnings inequality in urban China. Our findings shed new light on the changing gender inequality and the effective policies to promote gender equality in urban China’s labor markets.