Occupational segregation and the gender earnings gap in China: Devils in the details

Purpose – The purpose of this paper is to analyze the gender earnings gap in China with a focus on the role of differences in the occupational distribution of males and females. Design/methodology/approach – The authors use a procedure to model occupational attainments and decompose differences in earnings into an inter-occupational portion due to differences in the occupational distribution between males and females, and an intra-occupational portion due to differences in pay. The analysis is based on Chinese census data. Findings – The authors find that the male-female pay gap is virtually completely explained by wage discrimination defined as females being paid less than males within the occupation groups based on six broad occupations. Occupational segregation explains virtually none of the overall male-female pay gap, and in fact the “segregation” slightly favors women. However, the picture changes substantially when the analysis is conducted at themore disaggregate sub-occupation level within each of the six broad groups. Wage discrimination remains the prominent contributor to the pay gap across the disaggregated sub-occupations in each of the broad occupations. But there is considerable heterogeneity in the effect of occupational discrimination within the sub-occupations within the different broad occupational groups. Social implications – When females have the same occupation-determining characteristics as men, they are in lower paying sub-occupations within the professional group and to a lesser extent within manufacturing and operations jobs. There is considerable heterogeneity in the effect of occupational discrimination within the sub-occupations in the different broad occupational groups. Originality/value – The paper systematically examines the degree to which the gender earnings gap in China is due to the differences in occupational distributions of males and females, highlighting that the conventional Blinder-Oaxaca decompositions can under- or over- estimate the unexplained portion of the gender pay gap by controlling or not controlling for differences in the occupational distribution of males and females. The paper also shows that previous studies that have examined occupational segregation across aggregate occupational groups can mask important differences in the effect of occupational discrimination within the sub-occupations in the different broad occupational groups.