Gender-oriented statistical discrimination: Aggregate fertility, economic sector, and earnings among young Chinese workers

Abstract

Previous studies usually attribute residual gender pay gap net of human capital, job characteristics, and family responsibilities to discrimination against women, without directly exploring the underlying discriminatory mechanisms that generate gender inequalities in the labor market. By applying and extending the statistical discrimination model proposed by Yip and Wong (2014) to post-socialist urban China, we examine how age-specific fertility rate (ASFR)—as a proxy for the likelihood of women taking maternity leave—affects the earnings of young working women and men in urban China, as well as its differential impact across economic sectors. Using data compiled from a random sample of the 2005 one-percent mini-census of the People’s Republic of China, our analyses confirm that ASFR has a significant negative influence on the wages of young women, but not among young men. More importantly, such negative impact is limited primarily to private sector female workers, negligible in state-owned and collective enterprises, and even reverses to positive impact among female workers in government agencies and public institutions. Our findings suggest that private-sector employers use aggregate fertility to “evaluate” potential training and replacement costs and the productivity of female workers associated with maternity leave, thereby reinforcing persistent stereotypes and discrimination against women at the workplace.