Women and the Chinese Labor Market: Recent Patterns and Future Possibilities

Abstract

While many economists have advanced potential future growth strategies for the Chinese economy, none to our knowledge have done so with a specific consideration of the impacts these policies may have on women’s welfare measured in terms of labor market outcomes. In this article, we first discuss the relative status of women’s position in the Chinese labor force from the perspective of their employment levels, occupational segregation, and wages. We then calculate segregation indices and present and interpret recent employment data from the National Bureau of Statistics of China to consider how the labor market has evolved for women in the last decade. Interestingly, we find that occupational segregation by gender has in fact intensified since the onset of the radical reforms in China in the mid-1990s. Next, we contribute to the literature by evaluating potential growth policies for their impacts on women’s relative welfare in terms of labor market outcomes using our unique criteria for evaluation. We find that switching to a service-centered growth strategy could work to increase women’s relative welfare if implemented concurrently with additional policies aimed at reducing the otherwise potential negative implications for women’s relative welfare. Finally, we provide our own gender sensitive growth strategy suggestions which include our argument that an education-led growth strategy, for example, may have the largest positive impact on both the Chinese economy and women’s relative welfare.

Keywords:

• gender inequality
• growth
• labor markets

Notes

The growth rate of Gross Domestic Product in China reached its highest level since 1984 in 2007 when it experienced 13.6 percent growth and since this point, has steadily declined to just over half that rate falling to 7.1 percent in 2013 (National Bureau of Statistics of China, 2013).

Ding et al. (2009) find this gender bias in layoffs in their micro analysis of married women in China using data from the Chinese Household Income Surveys (three separate surveys from 1988, 1995, and 2002), consisting of married individuals from 11 different provinces while Liu (2007) reports similar results using a qualitative micro analysis of interviews of women in the Nanjing province.

Liu (2007) reports that as unemployment began to climb for both genders, the public discourse during the onset of the economic reforms strongly encouraged women to voluntarily leave paid labor and return to the household in order to ease the male unemployment problem; these social pressures emerged despite the fact that, relatively speaking, women’s unemployment was growing faster than men’s.

This data, and thus our discussions of these figures, are limited to formal urban sector employment due to the lack of availability of macro-level gender-disaggregated rural and informal employment data. Similarly, our analysis of gendered employment would benefit from a longer time horizon—at least encompassing the breadth of the period of economic reforms—however, we are limited by the availability of the data.

Bauer et al. (1992) use cross-sectional data consisting of a sub-sample (10 percent of the total survey which consists of 1 percent of the national population) of the 1987 census to analyze gendered employment and the relative status of women and men in the labor force.

Data availability limits this time frame as extensive sector decomposition was not published prior to the 1999 publication of the Chinese Labour Statistical Yearbook.

Data for the Duncan index is calculated using the “Proportion of Female Employment in Urban Units by Sector” index found in the China Labour Statistical Yearbook (National Bureau of Statistics of China, 2010).

Chi and Li (2008) use nationally representative data for 1987, 1996, and 2004 to decompose gender wage differentials across the distribution of earnings by utilizing an influence function regression and find that the gender wage gap substantially increased over time. Maurer-Fazio et al. (1997) estimate gendered wages by weighting total wages with the ratio of female employees in each sector using data from the National Bureau of Statistics (NBS) of China, controlling for province, industry, and ownership type. They find that the ratio of female-to-male wages declined from 94 percent in 1991 to 75 percent by 1994. Gustafsson & Li (2000) use Oaxaca-decomposition of sampling data from 10 provinces and find that the earnings ratio fell from 84.4 percent in 1988 to 82.5 percent in 1995. Bishop et al. (2005) use identical data as that of Gustafsson and Li and also find that the gender wage gap increased in urban China from 1988 to 1995.

Gustafsson & Li (2000), use micro-level data to estimate that about half of the gap is due to gender differences in characteristics such as education and industry, while the other half cannot be explained by their data. They cautiously argue that the unexplained portion may be an estimate of the magnitude of gender discrimination, though they consider that these differences may be driven by unobservable differences in productivity levels. Wang and Cai (2006) use macro data from the National Bureau of Statistics of China and micro data from the China Urban Labour Survey which conducted a survey in 2001 across five Chinese cities, namely, Fuzhou, Shanghai, Shenyang, Wuhan, and Xian and find that the gender differences in wages can be largely attributed to discrimination.

Liu et al. (2000) use a Binder-Oaxaca decomposition methodology and two surveys spanning the provinces of Shanghai (1996) and Jinan (1995) to estimate gendered wages and conclude that liberalizing more sectors would increase gender inequality in wages. Maurer-Fazio and Hughes (2002), using identical methodology with survey data spanning 12 provinces in 1992, find that the gender wage gap increased with the extent of liberalization/marketization where the state sector exhibited the smallest gender wage gap and the most liberalized sectors, the largest. Note that here, liberalization/marketization refers to the privatization of SOEs and the removal of constraints in the command structure that prevent market incentives from promoting efficiency.

We acknowledge that while there is a direct positive relationship between human capital accumulation and labor market outcomes (such as employment and wages) on a theoretical basis, institutional and social norms may limit women’s ability to capitalize on their increased educational attainment. In these circumstances, another strategy–with an aim to alter the existing norms–would be required in order to allow women to translate this attainment into positive outcomes in standards of living.