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This study provides empirical evidence for explaining the gender wage differential in China’s healthcare sector. We first propose a signalling game by capturing the progressive wage incentive in this sector. Next, we show that the model primitives are non-parametrically identified and estimable using recently developed methodologies related to measurement errors. Adopting a dataset from the China Household Income Project (CHIP2013), we provide empirical evidence for gender inequality in job placement for labour in the private sector. Moreover, there is no unequal treatment in China’s healthcare sector. Female labour in the private sector are more likely to subjectively choose job positions with less risk and more stable returns in response to the high-powered incentives that are provided, and this leads to gender wage differential in China’s healthcare sector.

Explaining the gender wage gap in China’s healthcare sector: a non-parametric analysis