Enterprise Restructuring and Labor Market Gender Gaps in Urban China

The employment gender gap in urban sector China significantly increased during the restructuring of state-owned enterprises that occurred in the late 1990s. This paper describes the relative impact of several mechanisms that led to an increase in the employment gender gap in this labor market. I find that the gender-asymmetric nature of enterprise restructuring during this period can explain almost 50% of increase in the urban non-migrant employment gender gap between 1990 and 2000. I relate observed cross-sectional employment rates to a simple model of dynamic transitions between employment states and show that, given non-employment, females’ shorter working horizons and a leftward shift in older female labor supply can significantly explain gender differences in re-employment rates among older workers. I then show that the contraction of older female labor supply during this period is related to the disappearance of publicly-provided childcare through increased time for daughter households. I conclude that the unobserved labor supply determinants of older females that contribute to the underestimate of the observed gender earnings gap include private costs and returns to on-the-job training and the propensity to help offspring households