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Labor Market and the Native-Immigrant Wage Gap: Evidence from urban China

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  • LIU Yang
  • KAWATA Keisuke

Abstract

By developing a model based on recent wage theories, we examine workers' wage determination, considering not only human-capital related factors but also the labor market. We also consider the price level using a city-specific consumer price index. Data come from a national survey in China, while unlike previous studies that examine temporary rural-urban migrants in China, we concentrate on permanent rural migrants who have obtained an urban household registration. We find that considering the effects of the labor market is important in examining workers' wage determination. The decomposition result shows that different effects of market tightness and unemployment benefits are the two primary reasons for the wage differential between the two groups, whereas education does not contribute to the wage gap. As a policy implication, our results indicate that supporting the workers' ability to adapt to the labor markets could reduce wage inequality.

Suggested Citation

  • LIU Yang & KAWATA Keisuke, 2015. "Labor Market and the Native-Immigrant Wage Gap: Evidence from urban China," Discussion papers 15142, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:15142
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    References listed on IDEAS

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    Cited by:

    1. Cuong Viet Nguyen & Thai Pham Minh, 2016. "Are migrants in large cities underpaid? Evidence from Vietnam," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-23, December.

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