The latest trend of gender wage gap in the urban labour market in China

Since 2008, China’s urban labour market has undergone a series of economic and institutional adjustments, such as the strengthening of labour protection policies, a transition in economic structure, and the relaxation of family planning policies, creating a new context for the gender wage gap. This paper examines the gender wage gap in urban China from 2007 to 2018, and finds that this gap narrowed significantly from 2007 to 2013, but widened again from 2013 to 2018. Our baseline model estimates the gender wage gap at 23.4% in 2007, 21.1% in 2013, and 25.8% in 2018. Using the Heckman two-stage regression to control for the impact of ‘pre-market’ sample selection in market participation decision-making, and using the endogenous switching model to control for the impact of ‘within-market’ selection in marriage and childbirth decisions, the paper finds the persistent U-shaped trend in gender wage gap across the observation years, while the gap in other estimation models was larger for 2007 and 2018. Marriage and childbearing are important drivers of the gender wage gap. A key finding is that following the relaxation of the one-child policy, the ‘motherhood penalty’ intensified. In 2018, the young and highly educated women faced the most severe wage penalties associated with childbirth, highlighting the unintended consequences of the new policy when corresponding social support was inadequate.