Can minimum wage increases narrow the gender wage gap? Evidence from China

Using data from the 2011-2019 China Household Finance Survey (CHFS), this paper examines the effect of minimum wage increases on the gender wage gap. The results show that minimum wage increases can significantly reduce the gender wage gap. We further examine the impact of minimum wages on the gender wage gap across the wage distribution and find that minimum wages are conducive to narrowing the gender wage gap at the bottom and middle parts of the wage distribution, but not conducive to reducing the gender wage gap at the upper part of the wage distribution. We also identity heterogeneous effects of minimum wages on the gender wage gap across age, education level, hukou, and work unit. Finally, we find that minimum wages have a negative effect on low-wage workers' employment. Therefore, governments need to weigh their role in reducing the gender wage gap against the potential negative employment effects when adjusting the minimum wage standard.