Relative Pay and its Underlying Determinants for Domestic Eldercare Workers in Urban China

The market of domestic services in China has grown rapidly since the country embarked on market transition in the late 1970s. Domestic workers for eldercare are in especially high demand as a result of the aging population and the changing family structure. This paper examines the relative pay of domestic workers for eldercare and its underlying determinants. The estimates show that holding constant the observable individual characteristics, domestic workers for eldercare earn 24 percent less than do other types of workers in the service sector in Shanghai. The analysis attributes the low wage of eldercare workers to the fact that domestic work is culturally devaluated, that eldercare is performed by workers from the most marginalized segment of the labour force in the cities, and that the users of eldercare are relatively poor among the users of paid domestic services.