Migrants as Second-Class Workers in Urban China? A Decomposition Analysis

GATE Working Paper No. 08-08

34 Pages Posted: 2 Apr 2008 Last revised: 8 Sep 2014

See all articles by Sylvie Démurger

Sylvie Démurger

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Marc Gurgand

National Center for Scientific Research (CNRS); National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST)

Shi Li

Beijing Normal University (BNU) - Business School

Yue Ximing

Renmin University

Date Written: March 1, 2008

Abstract

In urban China, urban resident annual earnings are 1.3 times larger than long term rural migrant earnings as observed in a nationally representative sample in 2002. Using microsimulation, we decompose this difference into four sources, with particular attention to path dependence and statistical distribution of the estimated effects: (1) different allocation to sectors that pay different wages (sectoral effect); (2) hourly wage disparities across the two populations within sectors (wage effect); (3) different working times within sectors (hours effect); (4) different population structures (population effect). Although sector allocation is extremely contrasted, with very few migrants in the public sector and very few urban residents working as self-employed, the sectoral effect is not robust to the path followed for the decomposition. We show that the migrant population has a comparative advantage in the private sector: increasing its participation into the public sector does not necessarily improve its average earnings. The opposite holds for the urban residents. The second main finding is that population effect is significantly more important than wage or hours effects. This implies that the main source of disparity is pre-market (education opportunities) rather than on-market.

Keywords: chinese labor market, discrimination, earnings differentials, migration

JEL Classification: J31, J71, O15, P23

Suggested Citation

Démurger, Sylvie and Gurgand, Marc and Li, Shi and Ximing, Yue, Migrants as Second-Class Workers in Urban China? A Decomposition Analysis (March 1, 2008). GATE Working Paper No. 08-08. Available at SSRN: https://ssrn.com/abstract=1115326 or http://dx.doi.org/10.2139/ssrn.1115326

Sylvie Démurger (Contact Author)

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France
(33 4) 72 86 61 05 (Phone)
(33 4) 72 86 60 90 (Fax)

HOME PAGE: http://www.gate.cnrs.fr/spip.php?article22

Marc Gurgand

National Center for Scientific Research (CNRS) ( email )

3, rue Michel-Ange
Paris cedex 16, 75794
France

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST)

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

Shi Li

Beijing Normal University (BNU) - Business School ( email )

No.19 Xinwai Str
Haidian District
Beijing, 100875
China

Yue Ximing

Renmin University ( email )

Room B906
Xianjin Building
Beijing, Beijing
China

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