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Seniority Wage System and Wage-Age Profile

In: Labor Market Institutions in China

Author

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  • Xinxin Ma

    (Hosei University)

Abstract

As a kind of wage determinationWage determination system in internal labor markets, seniority wageSeniority wage system has been observed in workplaces in many countries. This study investigates the seniority wageSeniority wage system in the Chinese context. Using data from the Chinese Household Income Project surveyChinese Household Income Project survey (CHIP), this study first examines theWage-age profile wage-age/tenure profilesWage-tenure profile in ChinaChina from 1995 to 2018. Five conclusions emerge: First, adverse U-shapedU-shaped wage-age and -tenure profilesWage-tenure profile exist in ChinaChina. Second, the wage-age profileWage-age profile of the public sectorPublic sector is deeper than that of the private sectorPrivate sector, while the wage-tenure profilesWage-tenure profile of the two sectors are similar. Third, the low-wage group’sLow-wage group age effect in the public sectorPublic sector is larger than that in the private sectorPrivate sector, while the high-wage group’s age effect in the public sectorPublic sector is smaller than that in the private sectorPrivate sector, suggesting that the seniority wageSeniority wage has a stronger influence in the public sectorPublic sector low-wage and private sectorPrivate sector high-wage groups. Fourth, the wage-age profileWage-age profile became flat after 1995, while the change in the wage-tenure profileWage-tenure profile was small. Fifth, changes in theWage-age profile wage-age/tenure profilesWage-tenure profile differ depending on corporate ownershipCorporate ownership type. The results indicate that the seniority wageSeniority wage system exists in both the public and private sectorsPrivate sector, with a greater influence in the public sectorPublic sector than in the private sectorPrivate sector. This suggests that wage determinationWage determination systems vary between the public and private sectorsPrivate sector.

Suggested Citation

  • Xinxin Ma, 2024. "Seniority Wage System and Wage-Age Profile," Springer Books, in: Labor Market Institutions in China, chapter 0, pages 143-169, Springer.
    • Handle: RePEc:spr:sprchp:978-981-97-6156-2_6
    DOI: 10.1007/978-981-97-6156-2_6
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