February 2009 Dispatch - Gender Inequality in Earnings in Industrialized East Asia

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A woman in Yunnan, China is pictured spinning product. Flickr/Y-A-K

Since 2005, research teams comprised of participants from across East Asia have been working on a collaborative survey project known as the East Asian Social Survey (EASS).1  The participating research teams include the Chinese General Social Survey (CGSS) from Hong Kong University of Science and Technology and Renmin University in China; Osaka University of Commerce in Japan (JGSS); SungKyunKwan University in Korea (KGSS); and the Taiwan Social Change Survey (TSCS) at the Academia Sinica, Taiwan. The plan of the project is to conduct a survey with different topics for every two years. The first EASS survey, which focused on Family, was conducted in 2006. KGSS had now integrated the data that the four research teams compiled by the end of 2008. This data set is now ready for research use, both by members of the teams and by other interested parties. The topic for the 2008 survey is Globalization and Culture.

During the past two decades, the export-oriented economies of Japan, Korea, and Taiwan experienced strong economic growth and rising income levels. More women entered the labor markets and obtained better-paid jobs. However, in the regions surveyed, men and women often do not equally share in economic prosperity and there still exists a sex gap in earnings. A paper recently co-written by this author and Paula England,2  using the 2006 EASS data, may be the first attempt to explore the size of the sex gap, the factors that explain the gap, and the variations among Japan, Korea, and Taiwan.3

To explain the disparity between the pay of men and women in the survey nations, we used regression analysis to predict the hourly wage from various characteristics, using separate regressions for men and women in each nation. Then we assessed how much human capital factors may contribute to the sex gap in pay. For each factor, there are two estimates of how much it explains, reflecting whether we use male or female slopes, or rates of return. The table below summarizes some of the paper’s preliminary findings. The last row of the table shows that the sex wage gap is highest in Korea, with Japan coming in second place. In Taiwan, women earned about 82 percent of what men earned. For comparison, in the United States in 2003, the comparable wage ratio of female-over-male was 79.4 percent.

What factors might explain the sex gap in earnings? In Japan, the table shows (20 percent for the make slope and 34 percent for the female slope) that education is a key factor—notably, women are less likely to be college graduates. Another key factor is that women are more likely to work in contingent or temporary jobs than in permanent, full-time employment. In the Korea case, the difference between the male or female slopes is small, and 37 percent (male) to 32 percent (female) of the gap is explained, again, by education, as fewer Korean women have completed college than men. In Taiwan, a much lower share (6 percent for men and to 0 percent for women) is explained, mainly due to potential work experience, followed by employment status. In Taiwan, women actually have more education than men, as more women than men have completed college. This education imbalance supports our finding that the sex gap is largest in Korea, where women are less educated than men, and smallest in Taiwan, where the reverse is true.

Human capital factors (education and potential work experiences) seem to explain smaller proportions in the societies with a smaller gap. On the one hand, if we were to attribute all the elements of the gap not explained by mean differences in our supply-side measures to be sex discrimination, this would imply that a higher portion of Taiwan’s (albeit smaller) gap can explained by pay discrimination. On the other hand, women in Japan and Korea are disadvantaged, both in their educational achievements and their opportunities for regular employment. The contingent or part-time jobs that these women do pay less per hour than do the permanent or full-time jobs in which their male counterparts are employed. The EASS survey indicates, thus far, that economic prosperity and advancement in human capital factors may not naturally bring about sex equality in earnings.

Notes

More information on the EASS can be found at http://www.eass.info.

Chin-fen Chang and Paula England "Gender Inequality in Earnings in Industrialized East Asia," to be presented at the Beijing RC28 Meeting, Renmin University, Beijing, China, May 14-16, 2009.

3  In this paper, we excluded Chinese data because the other three societies are more comparable to one another in terms of their economic development.

 

 

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