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Formal Employment, Informal Employment and Income Differentials in Urban China

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  • Guifu, Chen
  • Shigeyuki, Hamori

Abstract

Oaxaca’s study (1973), along with the China Health and Nutrition Survey (CHNS) questionnaire (2004 and 2006 pooling data), is used as the basis for this study in estimating the formal-informal employment hourly income differential, as well as the formal and informal male-female employment hourly income differential in urban China. The results indicate that differences in the characteristics between formal and informal employment account for a much higher percentage of the hourly income differential than do discrimination. In addition, ignoring the sample selection bias, one finds the formal male-female, the informal male-female hourly income differential and the degree of discrimination against informal women’s employment will be overestimated; conversely, the degree of discrimination against formal women’s employment will be underestimated.

Suggested Citation

  • Guifu, Chen & Shigeyuki, Hamori, 2009. "Formal Employment, Informal Employment and Income Differentials in Urban China," MPRA Paper 17585, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17585
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    References listed on IDEAS

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    6. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
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    More about this item

    Keywords

    formal employment; informal employment; income differentials; Chinese labor market;
    All these keywords.

    JEL classification:

    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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