Development Zone Establishment, Labour Demand Shocks, and Gender Wage Inequality: Evidence from Township-Level Spatial Analysis in China

Based on multi-source economic geography big data, this paper deeply examines the impact effects and mechanisms of development zones on the gender wage gap in the labour market from a town-level spatial scale. The study shows that while the establishment of development zones raises workers’ wage levels, it also widens the gender wage gap. Furthermore, by constructing a general equilibrium framework, we decompose the underlying mechanisms into labour demand and labour supply channels. Specifically, development zones significantly increase the labour demand in industries dominated by male workers relative to those dominated by female workers, thereby leading to a relative decline in the female labour income share. In comparison, although the spatial sorting effect on the supply side indeed restricts the commuting radius of women through the separation of workplaces and residences, the marginal impact of this mechanism is weaker than that of the demand side due to improved infrastructure. Further analysis shows that there is significant heterogeneity in the impact of development zones on gender wages in different locations. Taking catering and retail enterprises as examples, compared to development zones near urban areas, the establishment of development zones far from urban areas has a greater effect on increasing labour demand in female-intensive industries.