Increasing Urban Wage Inequality in China. Extent, Elements and Evaluation
John B. Knight
University of Oxford - Department of Economics
University of Nottingham - School of Sociology and Social Policy
Economics of Transition, Vol. 11, No. 4, December 2003
Two strictly comparable cross-section household datasets, relating to 1988 and 1995, are used to analyse the increase in wage inequality from an initially low level in urban China over this period of labour market reform. The institutional background and the evolution of policy are described. The rapid growth of wage inequality and the sharp widening of wage structure are quantified. Earnings functions are compared, and the increase in both the level and the inequality of wages are decomposed into their constituent elements. Quantile regression analysis is conducted to throw light on the relationships between the observed and the unobserved determinants of wages. Distinctions are made between the variables likely to represent human capital, discrimination, and segmentation. The evidence suggests that productive characteristics were increasingly rewarded as marketization occurred, but that discrimination and segmentation also grew. The move towards a fully-fledged labour market was by no means complete.
Keywords: China, labour market, wages, discrimination, segmentation, human capital, inequality, economic reform
JEL Classification: J31, J41, J42, J71, D31, D63Accepted Paper Series
Date posted: May 10, 2004
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo4 in 0.328 seconds