Changes in China's Wage Structure
Dennis Tao Yang
Chinese University of Hong Kong - Department of Economics
IZA Discussion Paper No. 6492
Using a national sample of Urban Household Surveys, we document several profound changes in China's wage structure during a period of rapid economic growth. Between 1992 and 2007, the average real wage increased by 202 percent, accompanied by a sharp rise in wage inequality. Decomposition analysis reveals 80 percent of this wage growth to be attributable to higher pay for basic labor, rising returns to human capital, and increases in the state-sector wage premium. Employing an aggregate production function framework, we account for the sources of wage growth and wage inequality in the face of globalization and economic transition. We find capital accumulation, skill-biased technological change, and export expansion to be the major forces behind the evolving wage structure in China.
Number of Pages in PDF File: 47
Keywords: wage growth, wage premium, wage inequality, capital accumulation, trade expansion, technological change, China
JEL Classification: J31, E24, O40working papers series
Date posted: April 28, 2012
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