Economic development, human capital, and gender earnings differentials in China

Gender earnings differentials in China during the course of development in the post-reform period were examined. The analysis showed that the female-male earnings ratio increased over time in all regions. The region with relatively rapid economic reforms had the highest female male earnings ratio. Decomposition of the gender earnings differential revealed that in the more developed region a lower percentage of the differential could be explained by gender differences in productive characteristics. Changes in the discriminatory component of the differential by region over time suggested that both the "competition" effect proposed by Becker [The Economics of Discrimination, 1971] and the effects of wage decentralization during economic reforms played a different role in the eastern and central regions versus their role in the western region. Further examination of the sub-components of the explained component of the differential highlighted the minor role of education in explaining the gender earnings differentials. (C) 2004 Elsevier Ltd. All rights reserved.