Using 1987, 1996, and 2004 data, we show that the gender pay gap in the Chinese
urban labor market has increased across the wage distribution, and the increase was
greater at the lower quantiles. We interpret this as evidence of the “sticky floor” effect.
We use the reweighting and recentered influence function projection method proposed
by Firpo, Fortin, Lemieux (2005) to decompose gender pay differentials across the
wage distribution. We find that the gender differences in the return to labor market
characteristics, also known as the “discrimination effect” or “unexplained gender pay
gap”, contribute most to the increase in the overall gender pay gap. The Firpo, Fortin,
and Lemieux method allows us to further decompose the gender pay gap into the
contribution of each individual variable. We find that the “sticky floor” effect may be
associated with a particularly low paid group of female production workers with
relatively less education working in non-state owned enterprises.