Essays on Gender Inequality in China

The dissertation consists of two applied microeconomics studies on gender inequality in China. In the first study, my coauthors and I explore the multiple switching behavior (MSB) in Multiple Price List (MPL) instrument. This instrument has been widely used to measure gender differences in risk preferences in experimental economics. MSB is believed to indicate low quality decision making. We develop a “nudge” protocol for the MPL that reduced multiple switching behavior (MSB) from 31% to 10% (p-value <0.001) without limiting the choice set. We further develop a conceptual framework to formally test three leading explanations for the nature of low quality decision-making in the MPL using the covariance of responses in the MPL with a second, simple risk instrument. Using a counter-balanced within and between-group experimental design, we find that low quality decision-making in the MPL is best explained by task-specific miscomprehension. In the second study, I examine the effect of the State-owned enterprise (SOE) reform on gender inequality in labor market outcomes. Between 1996 and 2001, the national SOE reform resulted in a massive layoff of over 35 million workers in urban China. I employ both difference-in-differences and instrumental variable strategies to identify the causal impact of this SOE on gender gaps in employment and earnings. I find that that the reform negatively affected women’s labor market outcomes substantially more than men’s outcomes. To explore whether the response to the SOE reform in related with traditional gender norms, I calculate male-to-female sex ratio using under age 10 cohorts and I find that the widening gender employment gap is entirely driven by the areas with high sex ratio. Bu the impact on gender rank gap is small and not significant in both areas.