The “Missing Women” and Gender Income Equality: Evidence from China’s One-Child Policy

China’s one-child policy limited all but 55 ethnic minorities in China to having one child during their lifetime. This policy dramatically reduced the total population in China but also skewed the sex ratio due to Chinese parents’ deeply rooted cultural preference for sons. Previous literature that examined the effects of the one-child policy mainly focused on the sex ratio, but little attention has been paid to some of the consequences. This paper discusses the phenomenon of the “Missing Women” and analyzes subsequent changes in the gender wage gap using data from the Chinese Household Income Project (CHIP) in 1988, 1995, 2002 and 2007. The theory of labor demand implies that if male and female labor are not close substitutes, a decrease in the supply of women workers could increase women’s wages and shrink the gender pay gap. Moreover, if an only daughter receives greater human capital investments than if a son was also born to the same family, a woman’s productivity may increase and consequently increase wages. These mechanisms may suggest the gender pay gap is subject to being narrowed under the influence of the one-child policy