Regression in Analysis of Gender Earnings Gap in China

The goal of this paper is to analyze the gender differentials in the returns of various characteristics and gender earnings differentials along the conditional earnings distribution in Chinese case. The data we use is the Chinese Household Income Project for the year 1988 and 1995. We use the modified standard Mincerian wage equation to estimate the marginal earnings distribution as a function of workers’ characteristics applying quantile regression approach. We then break down the unadjusted gender earnings gap into the “explained part” (due to differential in characteristics) and the “unexplained part” (due to the different returns to the endowments) by using Oaxaca decomposition method. We found that the returns to experience, childbirth, marriage and education do not vary much at different quantiles for 1988, but show substantial variation in 1995. In contrast, little difference in discrimination exists across quantiles in 1995 while significant variation in 1988. The results also suggest that low earnings women suffer greater discrimination under the socialist conditions of 1988 than under the emerging market conditions of 1995; higher earnings women are faced up with greater discrimination in 1995 than in 1998. * The author would thank Dr. John Bishop and Dr. Frank Luo for their input and guidance with all respects of this paper.