Gender and labor retrenchment in Chinese state owned enterprises: Investigation using firm-level panel data

In the late 1990s, China's state-owned enterprises (SOEs) underwent dramatic labor retrenchment, drawing considerable attention to how women fared relative to men during the retrenchment process. However, almost all the existing studies on the subject rely on individual-level data. In this paper, we study the gender patterns of SOE labor retrenchment using a unique enterprise-level dataset for the period from 1995 to 2001. We find that disproportionately large share of discharge was borne by female workers and that female discharge rates were more sensitive to output growth than male discharge rates. Further, estimating dynamic labor demand equations by gender, we find that female employment was more sensitive to negative output shocks experienced by enterprises than male employment but less sensitive to positive output shocks. Further, we find that sensitivity of female employment to output was greater for reformed than non-reformed enterprises and for male-intensive than female-intensive sectors. These results provide new insights into the gender patterns of employment adjustment of Chinese SOEs to output shocks during the retrenchment period.

► We examine gender patterns of SOE labor retrenchment using a firm-level dataset. ► Discharge rates for females were more sensitive to output changes than for males. ► Female employment was more responsive to output shocks than male employment. ► Gender employment response was asymmetric for positive and negative output shocks. ► Female employment response to output was greater for reformed enterprises.