To Whom Is Contact Use Beneficial? The Impacts of Self-Selected Contact Use on Gender Income Differentials in the Transitional Economy of Urban China

Abstract

In this study, we examined the effect of contact use on the gender earnings gap in urban China, by taking into account the existence of self-selection effect. We theorised two sources of individuals’ self-selected job obtainment behaviour; namely, the structuralised gender-segregated employment environment and one’s internalisation of the structural constraints. Based on data collected from the highly marketized Chinese city Xiamen, our estimations from the Endogenous Switching Regression model show that there is indeed a significant tendency, in which women with marketable qualifications use social contacts to find jobs, even though their obtained income would have increased significantly had they chosen not to rely on contacts to find jobs. Men enjoyed premiums from their job search strategies, whether they relied on contact use or not.