1 GENDER DIFFERENTIALS IN THE PAYOFF TO SCHOOLING IN RURAL CHINA* Weiwei Ren Business School University of Western Australia and Paul W. Miller School of Economics and Finance Curtin University ABSTRACT This paper examines the gender differential in the payoff to schooling in rural China. The analyses are based on a framework provided by the over education/required education/under education literature, and the decomposition developed by Chiswick and Miller (2008). It shows that the payoff to correctly matched education in rural China is much higher for females than for males. Associated with this, the wage penalty where workers are under qualified in their occupation is greater for females than for males. Over educated females, however, are advantaged compared with their male counterparts. These findings are interpreted using the explanations offered for the gender differential in the payoff to schooling in the growing literature on earnings determination in China. Keywords: China, Schooling, Earnings, Rates of Return JEL Codes: J31, J62, J70 * We are grateful to two anonymous referees, and to participants at the 2009 International Symposium on Contemporary Labour Economics, at the Wang Yanan Institute for Studies in Economics of Xiamen University, for helpful comments. Ren acknowledges financial support from the University of Western Australia via a University Postgraduate Award and from the Australian Research Council via a Postgraduate Scholarship. Miller acknowledges financial assistance from the Australian Research Council. Address for correspondence: Paul W. Miller, School of Economics and Finance, Curtin University, GPO Box U1987, Perth, WA 6845, Australia, Email: Paul.Miller@curtin.edu.au, Telephone: +61 8 9266 7758, Fax: +61 8 9266 3026