This paper offers a theoretical and empirical analysis on the sources of the narrowing gender gap in wages, based on two census data sets in Hong Kong. Extending a recent important contribution by Galor and Weil (1996), the model implies that when an economy transforms from a manufacturing-oriented economy to service-oriented economy, a woman's productivity relative to a man's will generally increase. The model, together with the Galor-Weil model, predicts that the gender gap is smaller in the occupations in which physical labor is less intensively used. The implication of the theoretical analysis is then tested based on one percent random sub-samples of 1981 and 1991 population censuses. The empirical results are strongly supportive of the predictions of our model.