Analysis Of Female Labor Supply In Urban China

Along with the deepening of economic reforms, the market mechanisms now play an essential role in the distribution of labor resources in China. Labor resource arrangement no longer depends on administrative means, but on free choice of labor itself. Female labor supply is always an indispensable part of labor market. According to census data, female labor force participation rate of China was 70.6% in 2000, and 67% in 2002. However, the participation rate of its USA counterparts was 60.3%, Taiwan got an even less rate which is 46%. Although our female labor force participation rate was declining recent years, it still ranked 17th in the world in 2007. Then questions are raised: what causes such a high female labor force participation rate in China? Whether the economic reform brings an effect on it? If so, to what extent?In this paper, we study current situation of female labor supply using the most recent survey data from the Chinese Household Income Project (CHIP-2002), and we also get evidences about the existence of gender discrimination on our labor market through empirical analysis. Our results show that there exists two ways of gender differentials, wage disparity and non-wage disparity, female labor force are discriminated in both ways. According to Oaxaca decomposition, human capital disparities between female and male workers and sex discrimination explain 50% of the total wage differentials respectively. Meanwhile, sex differentials on contract types, which indicate gender non-wage disparity, are mostly due to discrimination.In the meantime, this paper also investigates determinants of female labor supply using the CHIP-2002 data. Two-stage least squares estimations show that wage rate, total income of other family members, and education were main factors affecting female labor supply. The annual working hours of female worker increase with hourly wage, but decline with total income of other household members; and highly educated women appear to work less. We discussed the difference in labor supply responses among married and unmarried women, female household head and female non-head household members. The results show that the labor supply of married women and female household heads is relatively inelastic.