A comparison and decomposition of reform-era labor force participation rates of China's ethnic minorities and Han majority

Purpose – The purpose of the paper is to examine observed differences in China's ethnic majority and minority patterns of labor force participation and to decompose these differences into treatment and endowment effects. Design/methodology/approach – Data from the three most recent population censuses of China are employed to explore differences in the labor force participation rates of a number of China's important ethnic groups. Gender-separated urban labor force participation rates are estimated using logit regressions, controlling for educational attainment, marital status, pre-school and school-age children, household size, age, and measures of local economic conditions. The focus is on the experience of six minority groups (Hui, Koreans, Manchu, Mongolians, Uygurs, and Zhuang) in comparison to the majority Han. The technique developed by Borooah and Iyer is adopted to decompose the differences in labor force participation rates between pairs of ethnic groups into treatment and endowment effects. Findings – Sizeable differences are found between the labor force participation rates of prime-age urban women of particular ethnic groups and the majority Han. Men's participation rates are very high (above 95 percent) and exhibit little difference between Han and ethnic minorities. For almost all pairwise comparisons between Han and ethnic women, it is found that differences in coefficients account for more than 100 percent of the Han-ethnic difference in labor force participation. Differences in endowments often have substantial effects in reducing this positive Han margin in labor force participation. Roughly speaking, treatment of women's characteristics, whether in the market or socially, tend to increase the Han advantage in labor force participation. The levels of these characteristics on average tend to reduce this Han advantage. Research limitations/implications – The paper analyses only one aspect of the economic status of China's ethnic minorities – labor force participation. It would be useful also to examine income, educational attainment, occupational attainment, and unemployment. Originality/value – This paper contributes to and expands the scant literature on ethnicity in China's economic transition.