ANALYSIS OF GENDER WAGE DIFFERENTIAL IN CHINA’S URBAN LABOR MARKET

Abstract

This paper estimates the gender wage gap and its composition in China’s urban labor market. The traditional Blinder–Oaxaca (1973) decomposition method with different weighing systems is employed. To correct for potential selection bias caused by women’s labor force participation, we employ the Heckman’s two-step procedure to estimate the female wage function. A large proportion of the gender wage gap is unexplained by differences of productive characteristics of individuals. Even though women have higher level of education attainments on average, they receive lower wages than men. Both facts suggest a potential discrimination against women in China.