With the move to a more market-oriented economy in China, there is evidence of increased inequality in the incomes earned by men and women. To explore this outcome, we turn to an aspect of Chinese society that is pervasive in both economic and social contexts, namely, the Chinese variant of social capital, guanxi. It appears that in an imperfect labour market characterised by frictions, such as restricted mobility, costly job search, and limited employment alternatives, the cultivation of guanxi is important in reducing these transaction costs. The notion that investing in social capital can enhance an individual's opportunities leads to the development of a theory of discrimination that may explain the gender inequalities accompanying marketisation in China, and might be more generally relevant. The model of earnings discrimination is premised on imperfect product and labour markets. Under these conditions, we show that differential wages for similarly productive workers is a profit maximising outcome for firms. We apply this theory in an attempt to explain the trend of increasing gender inequality in earned income in urban China during the current reform period. First, pre-labour market gender inequality is investigated through developing a model of parental investment in children's human capital to discern whether there are productive differences between men and women prior to entering employment. In 1995, household expenditure on children's education is affected by perceived future earnings differentials and support of parents in retirement. Regarding labour markets, an original survey designed to test our model of social capital was administered in urban China in early 2000 and pertained to 1999. We find that there are differences between men and women in their investment in guanxi that correspond to gender inequalities in earned income and rates of re-employment. Both empirical chapters provide evidence in accordance with the predictions of the theory.

Lee Chung-man. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2004. / Includes bibliographical references (leaves 58-61). / Abstracts in English and Chinese. / Abstract --- p.i / Acknowledgement --- p.iv / Table of Contents --- p.v / List of Tables --- p.vii / Chapter Chapter 1. --- Introduction --- p.1 / Chapter Chapter 2. --- Literature Review --- p.6 / Chapter 2.1 --- Empirical Findings on Gender Wage Differentials --- p.6 / Chapter 2.2 --- The Determinants of the Earnings Equation --- p.8 / Chapter 2.3 --- Decomposition of Gender Wage Differentials --- p.12 / Chapter Chapter 3. --- Data Description --- p.17 / Chapter Chapter 4. --- The Gender Earnings Gap in Hong Kong --- p.22 / Chapter 4.1 --- The Overall Gender Earnings Gap in Hong Kong --- p.22 / Chapter 4.2 --- The Gender Earnings Gap by Age Cohorts --- p.23 / Chapter 4.3 --- The Gender Earnings Gap by Education Levels --- p.24 / Chapter 4.4 --- The Gender Earnings Gap in Different Occupations --- p.26 / Chapter Chapter 5. --- The Earnings Equation and Return to Education in Hong Kong --- p.28 / Chapter 5.1 --- Determinants of Monthly Earnings --- p.28 / Chapter 5.2 --- The Overall Regression Pattern of the Earnings Equation --- p.29 / Chapter 5.3 --- Return to Education by Age Cohorts --- p.31 / Chapter 5.4 --- Return to Education in Different Education Levels --- p.32 / Chapter 5.5 --- Return to Education in Different Occupations --- p.33 / Chapter Chapter 6. --- Decomposition of the Gender Wage Differential --- p.36 / Chapter 6.1 --- Results from the Blinder-Oaxaca Male Weighted Decomposition --- p.38 / Chapter 6.2 --- Results from the Blinder-Oaxaca Female Weighted Decomposition --- p.40 / Chapter 6.3 --- Results from other Decomposition Approaches --- p.41 / Chapter 6.4 --- Decomposition Results by Groups --- p.43 / Chapter 6.5 --- Comparison for the Decomposition Approaches --- p.52 / Chapter Chapter 7 --- Conclusion --- p.55 / Bibliography --- p.58 / Appendix --- p.62 / Tables --- p.68

published_or_final_version / Economics and Finance / Master / Master of Economics

Kung Ching-yi. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2002. / Includes bibliographical references (leaves 187-191). / Abstracts in English and Chinese. / Abstract --- p.i / Acknowledgement --- p.iii / Table of Contents --- p.v / List of Figures --- p.vi / List of Tables --- p.vii / Chapter Chapter 1. --- Introduction --- p.1 / Chapter Chapter 2. --- Literature Review --- p.8 / Chapter Chapter 3. --- Data --- p.32 / Chapter Chapter 4. --- The Gender Wage Differential: A First Look --- p.49 / Chapter Chapter 5. --- Returns to Schooling --- p.89 / Chapter Chapter 6. --- Decomposition of Gender Wage Differential --- p.140 / Chapter Chapter 7. --- Change of the Gender Wage Differentials from 1988through1999 --- p.163 / Chapter Chapter 8. --- Conclusion --- p.178 / Appendix: Alternative Treatments of Schooling Years and Potential Experience --- p.181 / References --- p.187