Expanding Gender Disparities in Income

“Gender Equality in China's Economic Transformation” was published October 2014 and was the collaborative efforts of UN Women, UN Systems in China and experts from Peking University and National Women’s University. It covers gender issues in the labor market during China’s economic transformation and the causes of gender disparity and inequality in three selected areas: employment opportunities, income and unpaid labor.

In the era of a planned economy, the state had uniform administrative regulations on wage standards and pay scales, and the employers had no discretion over employees’ payment. The privatization process of state-owned enterprises during the 1990s, gave increasing autonomy in management to companies and other employers who now had the right to decide the type of work and wage payment of their employees

According to the report, gender disparity in income has been expanding from 1990 to 2010. The average income of urban women as apercent of that of men dropped from 77.5% in 1990 to 67.3% in 2010. This number dropped even further in rural areas from 79% to 56%, ultimately resulting in women earning almost half of the income of rural men.

The gender gap in educational attainment has been gradually narrowed since the market-oriented economic reform. It only took three decades for the proportion of female college students to double and surpass that of male college students. The gap in average schooling years of men and women narrowed from 1.9 years in 1990 to less than a year in 2010. This, however, has not decreased the gender gap in income. The report claims that discrimination within occupations contributes as much as 68% of the gender gap in wage payment.

The report listed two different studies’ statistics. The first study found that the annual income of women was 84.0% of that of men in 1988, 80.0% in 1995 and 79.0% in 2002, while the second found these numbers to be 94.2% in 1989, 76.4% in 1993 and 77.5% in 1997. The increase in income disparity in rural areas has been even greater than that in urban areas. The average income of rural working women was 79% of that of men in 1990 and 56% in 2010, meaning that the average income of rural women was only a bit more than half of the income of rural men. Overall, women comprised only 24.4% of the highest income group, while they accounted for 65.7% of the lowest income group.

The major reason behind the gender income gap is gender segregation in the labor market. For example, engineers, technicians and senior managers are predominately men, as expected by the traditional social division of labor and social norms, whereas secretaries and nurses are mostly women. On the other hand, male migrant workers are mostly in the construction sector, whereas female migrant workers are primarily concentrated in the hair salons, housekeeping, and service businesses which compose the sectorial segregation.

According to the Chinese Family Panel Studies in 2011, men’s wages were higher than women’s in every sector. However, the gender gap in wage payment in the public sector and the state-owned enterprises was smaller than that of the private sector or household businesses. The gap between the annual wage of male managers and that of female managers is roughly 13,000 RMB, which is the biggest in all occupations. The wage of male clerks and that of female clerks is almost the same, which is the smallest in all occupations.

Under the traditional gender division of labor and social norms, women have to take up most of the family care responsibilities, so many women choose lesser-paying jobs that are more time flexible or less physically demanding. Gender stereotypes or information asymmetry also leads to discrimination against women by employers. Additionally, this social discrimination and personal preference are reinforcing each other in that the injustice women suffer from in the labor market dampen their willingness to work, and further cultivates the perception of “female occupations.”