Compulsory Education and Gender Inequality in China’s Structural Transformation

This paper examines whether education can play a role in mitigating gender inequality in the process of sectoral reallocation of labour. We exploit the exogenous variations in educational attainment induced by the implementation of the 1986 Compulsory Education Law (CEL) in China. Using data from the 2018 wave of the China Family Panel Studies (CFPS) and a cohort difference-in-differences (DID) approach, we find that the CEL narrowed the gender gap in education for rural residents, but it did not reduce gender inequality in labour market outcomes, such as wage labour participation and wage rate. Our analysis reveals that this persistent inequality in labour market outcomes can be attributed to gender differences in migration and occupational choices. Specifically, rural males exposed to the CEL were more likely to migrate outside local provinces and work in low-skilled manufacturing sectors, while rural females tended to stay within local counties and work in low-skilled service sectors. Furthermore, we provide evidence that their differential migration responses are driven by household labour divisions and social gender norms, rather than disparities in cognitive skills.