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What caused the wage convergence between urban natives and migrants in China?

Author

Listed:
  • Mengdan Li

    (Faculty of Economics and Business, Hokkaido University)

Abstract

In the Chinese labor market, the wage gap between urban natives and rural-urban migrants has narrowed 17% from 2002 to 2013. This research focuses on wage convergence and seeks to underpin the reasons. I utilize the Chinese Household Income Project (CHIP) survey dataset and employ Juhn, Murphy, and Pierce (1991) decomposition method to undertake the analysis. I find three main factors that caused the closing wage gap: reduced discrimination (74.45%), favorable wage structure (31.24%), and improvement in job characteristics of migrants (24.56%). But the differentials in schooling quality widen the wage gap by 45.00%. This study further explores the wage gap trends in different skill groups and finds that low-skilled migrants benefit more than high-skilled from the labor market.

Suggested Citation

  • Mengdan Li, 2020. "What caused the wage convergence between urban natives and migrants in China?," Economics Bulletin, AccessEcon, vol. 40(3), pages 2275-2288.
    • Handle: RePEc:ebl:ecbull:eb-19-01075
    as

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    References listed on IDEAS

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    4. Ma, Xinxin, 2018. "Labor market segmentation by industry sectors and wage gaps between migrants and local urban residents in urban China," China Economic Review, Elsevier, vol. 47(C), pages 96-115.
    5. Margaret Maurer-Fazio & Ngan Dinh, 2002. "Differential Rewards to, and Contributions of, Education in Urban China???s Segmented Labor Markets," William Davidson Institute Working Papers Series 508, William Davidson Institute at the University of Michigan.
    6. Meng, Xin & Zhang, Junsen, 2001. "The Two-Tier Labor Market in Urban China: Occupational Segregation and Wage Differentials between Urban Residents and Rural Migrants in Shanghai," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 485-504, September.
    7. Myeong‐Su Yun, 2009. "Wage Differentials, Discrimination And Inequality: A Cautionary Note On The Juhn, Murphy And Pierce Decomposition Method," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(1), pages 114-122, February.
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    Cited by:

    1. Wang, Haining & Cheng, Zhiming, 2021. "Mama loves you: The gender wage gap and expenditure on children's education in China," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1015-1034.

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    More about this item

    Keywords

    wage convergence; JMP decomposition; rural-urban migrants;
    All these keywords.

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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